Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

GLAMORGAN COUNTY COUNCIL BILL [Lords]

Queen's Consent, on behalf of the Crown, signified.

Read the Third time and passed, with Amendments.

HUMBER BRIDGE BILL

Read the Third time and passed.

Oral Answers to Questions — SOCIAL SERVICES

In-Patient Costs

Mr. Carter-Jones: asked the Secretary of State for Social Services what is the average cost per patient in intensive care units, surgical departments of hospitals, acute departments in large general hospitals, geriatric wards, mental illness and mental handicapped departments; and if he will make a statement.

The Under-Secretary of State for Health and Social Security (Mr. Michael Alison): Information is not available in the form requested. The patient costs collected summarise the activities of each hospital as a whole, classified according to its overall type.

Mr. Carter-Jones: While thanking the Minister for that non-answer, may I ask whether he is not convinced that the amount involved is a substantial sum? Will he consider whether it is possible to keep patients out of hospital, thereby saving considerable sums of money, and sharing such savings among local authorities and the relatives of patients by pro-

viding massive support in technical aid, access and money so that these people can lead a dignified life at home when they so wish?

Mr. Alison: I take the hon. Member's point. He will have noticed from the public expenditure White Paper that the rate of increase in resources allocated for the personal social services operated at local level is increasing at about three times the rate of public expenditure as a whole.

Dr. Stuttaford: Would my hon. Friend agree that the fact that his Department has recently decreed that items hitherto placed on the revenue account are now to be charged to capital account means that capital expenditure on hospitals will fall by 10 per cent. in the next few years? Is he aware that for the East Anglia Regional Hospital Board that is equivalent to sacrificing one district general hospital?

Mr. Alison: I cannot reconcile my hon. Friend's figures with the fact that the total capital sum to be spent on hospital building in the present five-year public expenditure period is 50 per cent. greater than that spent by our predecessors.

Social Workers (Training)

Mr. Dormand: asked the Secretary of State for Social Services what guidance his Department has given about the training of social workers.

The Secretary of State for Social Services (Sir Keith Joseph): Promotion of social work training is the responsibility of the Central Council for Education and Training in Social Work, whose interim plans envisage an expansion in the output of qualified staff from training courses of about 50 per cent. between now and 1976. In asking local authorities for 10-year development plans for the social services, I have suggested that in forecasting their training programmes they should assume a substantial and continuing expansion in output of qualified staff throughout the period of the plan.

Mr. Dormand: Does the right lion. Gentleman agree that there will be a vast increase in the number of social workers in the next few years? In view of this and the wide variety of the work involved, does he not think that the time has now arrived to take a broad look at


the whole of education and training for social workers? Will he in the first place take steps to call a conference of all interested parties, which would include the Department of Education and Science and representatives of social workers, to assess future needs and in particular to stop the fragmentation of training and education which is already taking place?

Sir K. Joseph: The Central Council is an independent body and I think that the best thing I can do is to suggest that the hon. Member might meet the chairman or officers of the council.

Mr. Edward Taylor: Does my right hon. Friend agree that one way in which we could expand social worker recruitment would be to remove uncertainty among medical social workers about their future under the health service reorganisation? Has any progress been made in this connection?

Sir K. Joseph: Yes. I believe that I have heard and digested all the arguments on both sides and I hope to come to a decision very soon.

Mr. Grimond: Can the right hon. Gentleman tell us how the supply of trained social workers is keeping up with the growing demand?

Sir K. Joseph: There is an almost in exhaustible demand for trained social workers. The training programmes are expanding as fast as is practical but there are not enough trained social workers coming out yet.

Community and Cottage Hospitals

Mr. Moate: asked the Secretary of State for Social Services when he expects to be able to publish the results of his study on the future rôle of community hospitals.

Mrs. Knight: asked the Secretary of State for Social Services whether he is now in a position to make a statement on the future position of cottage hospitals.

Sir K. Joseph: I cannot at present add to my reply to my hon. Friend the Member for Billericay (Mr. McCrindle) on 6th February.—[Vol. 850, c. 60.]

Mr. Moate: Does my right lion. Friend agree that many small local hospitals have a rôle to play in strengthening the

links between general practitioners and the hospital service, and also in providing much-needed local minor casualty services? When he presents his report, will he consider the possibility of allocating extra resources for the modernisation of many of these local facilities?

Sir K. Joseph: The Government last year announced that, contrary to previous policy, they saw a need for the survival of a number of cottage hospitals to serve the rôle of community hospitals in support of district general hospitals. That cannot be a charter for the survival of all cottage hospitals. I hope to make a statement within a relatively short time.

Mrs. Knight: Is my right hon. Friend studying the suggestion that patients with relatively minor ailments needing fairly simple treatment are often dealt with just as well and considerably more cheaply in cottage hospitals than in hospitals of the juggernaut variety?

Sir K. Joseph: It is the definition of what conditions are and are not suitable for community hospitals that is being discussed by me with the medical profession.

Dr. Summerskill: Does not the right hon. Gentleman agree that the maintenance of the small community hospital encourages the concept of community care and that approximately one-third of the patients who are now in large hospitals, particularly geriatric and mentally ill patients, could be cared for in smaller hospitals which are easier to staff and usually cheaper to run?

Sir K. Joseph: Yes. I am glad that the Labour Party has changed its view about the function of the community hospital.

Retirement Pensions

Mr. Leadbitter: asked the Secretary of State for Social Services, taking the retirement pension for single and married persons as 100 at the date of the last increase, what are the values at the latest available date.

The Under-Secretary of State for Social Services (Mr. Paul Dean): The value was 98·5 at January 1973.

Mr. Leadbitter: Is the Minister aware that those figures do not reflect the serious


situation of old-age pensioners? Have not his right hon. Friends recently refused to help old-age pensioners with the cost of television licences and failed to protect old-age pensioners against the pressures of increasing prices? Will he therefore treat this matter with greater urgency?

Mr. Dean: The figure I have given is entirely accurate. It means that just over 1p in the pound has been lost from the real value of the pension. As the hon. Gentleman knows, for the first time the Government are committed to an annual review of pensions.

Sir B. Rhys Williams: Will my hon. Friend ask the Chancellor of the Exchequer when he introduces his Budget this afternoon to announce a sharp increase in earnings-related contributions to national insurance so that when the up-rating Bill is introduced in the autumn the pensioners can have a bumper increase?

Mr. Dean: I am sure that my hon. Friend would not expect me to have a moment of glory by anticipating my right hon. Friend's statement, even if I knew what was in it.

Disabled Persons' Vehicles

Mr. John Hannam: asked the Secretary of State for Social Services if he will replace existing three-wheeled disabled vehicles with passenger-carrying four-wheeled vehicles, in view of further representations made on the subject.

Mr. Alison: This and other questions relating to the vehicle service will be considered in the light of the report on the mobility needs of disabled people expected later this year.

Mr. Hannam: Does my hon. Friend agree with the conclusions of the survey recently carried out by the Devonian Orthopaedic Association, which showed that of 51 three-wheelers driven by disabled drivers 95 per cent. were found to be unsafe in windy conditions, more than 95 per cent. were found to be dangerously slow on hills and an average of 13 breakdowns occurred in every 4,000 miles? Does not this demonstrate that the three-wheeler is unsafe, unreliable and antisocial and should be changed as a matter of priority?

Mr. Alison: It is not beneficial to the large number of people who use and enjoy using three-wheelers, and have done so for many years, to cast unnecessary doubt upon the reliability or safety of these vehicles. They are safe vehicles which, if regularly maintained and properly looked after, give good service.

Mr. Ewing: Does not the Minister agree that the provision of three-wheeler vehicles is an example of miserable penny-pinching? Is not the answer to stop the manufacture of three-wheeled vehicles and to supply four-wheeled vehices to provide for the travelling companionship which disabled people so vitally need?

Mr. Alison: Some categories of disabled people can secure four-wheelers. There are some categories of disabled people who can drive only three-wheelers with their light front-wheel steering.

Mr. Marten: I appreciate that the Government must await the outcome of the inquiry by Baroness Sharp which was supposed to be due in February. Will the Minister explain why it has been delayed and say whether, when it comes, it will be published?

Mr. Alison: I cannot give a detailed reason for the delay, but no doubt the complexity of the subject which is being investigated has a bearing on it. The report, when available, will be published and my hon. Friend will be able to judge for himself how deeply the matter has been investigated.

Mr. Kinnock: Is not the Minister convinced of the need for the family use of invalid vehicles? Is not the strongest argument for four-wheeled vehicles that disabled people should not be isolated from ordinary family life?

Mr. Alison: There is no doubt a strong case for the family use of invalid vehicles. There is an even stronger case for the National Health Service to concentrate resources on long-stay hospitals, mental illness hospitals and geriatric hospitals.

Hospital Developments (Blyth)

Mr. Milne: asked the Secretary of State for Social Services if he will make a statement on his Department's talks and discussions with Northumberland County Council, Blyth Borough Council and the


various hospital boards concerned in future hospital developments in Blyth and the retention of the existing hospitals.

Sir K. Joseph: The consultations have been undertaken, as is normal practice, by the Newcastle Regional Hospital Board. I shall consider fully the representations and the board's recommendation before reaching a decision.

Mr. Milne: I thank the Minister tor that reply, but will he bear in mind the view expressed to him by the Blyth League of Hospital Friends which has done excellent work for the patients of Blyth hospitals and whose knowledge of local hospital needs surpasses that of the hospital boards, and also the views of the Beulah House Association which has fought to retain this hospital or to secure an alternative one?

Sir K. Joseph: Yes, Sir.

Mrs. Monks: Are similar consultations going on with the Lancashire County Council?

Sir K. Joseph: I do not have the details in my mind to enable me to answer my hon. Friend's question. The regional hospital boards must carry out consultations before making proposals for any closure.

Industrial Disputes (Benefit)

Mr. Bruce-Gardyne: asked the Secretary of State for Social Services if he will make a statement on the progress of his investigation into the payment of supplementary benefit in industrial disputes, indicating when he now expects to complete it.

Sir K. Joseph: The Government's review is continuing and I cannot forecast a date for its conclusion.

Mr. Bruce-Gardyne: Is my right hon. Friend satisfied that the sight of strikers striking in defiance of an order making a strike illegal under phase 2 of the counter-inflationary policy and receiving subsidy from the taxpayer to prolong that strike will appear entirely logical to the mass of the community? Will he confirm that it is likely that such strikers in phase 2 will also receive subsidised butter supplies?

Sir K. Joseph: The question of subsidised butter is still being considered by Ministers. It is not the striker who receives the benefit—[HON. MEMBERS: "Hear, hear."] I apologise to my hon. Friend for drawing cheers from an unwelcome quarter on this subject. It is not the strikers who draw benefit, except in the rarest case; it is the wives and children. It still remains a matter of urgent public concern that £8 million of the taxpayers' money, coming to some extent from relatively poor people in indirect taxation, went for this purpose last year. That is why the review by Ministers is so important.

Mr. Wellbeloved: Will the Minister bear in mind that it is in the national interest that there should be reconciliation and co-operation rather than confrontation and conflict, and that the spirit of the British working class will not be broken by petty restrictions on payments to the wives and families of men fighting for their democratic rights?

Sir K. Joseph: Yes, but I hope that the hon. Gentleman will preach the same doctrine to all concerned.

Mr. William Clark: Does not my right hon. Friend agree that it is illogical for unions to bring men out on strike and refuse to give them strike pay and that it is nonsensical that the taxpayer should adopt the rôle of the trade unions and pay strike pay? Surely there should be a notional deduction from supplementary benefits to take account of strike pay which should be paid.

Sir K. Joseph: The possibilities inherent in my hon. Friend's supplementary question are among those being considered by Ministers, but Ministers have to be sure that any proposal that is introduced is workable and will not harm wives and children.

Mr. Heffer: The right hon. Gentleman should not apologise for drawing Opposition cheers. He is only explaining to his hon. Friends in words of one syllable exactly what the situation is. Is it not clear to the right hon. Gentleman and his right hon. Friends that the reason why the Government have nad to pay out so much in benefits this year is the absurd industrial relations policy pursued by the Government?

Sir K. Joseph: No, I do not accept that, and I am glad to correct the hon. Gentleman. The record of payment of benefit was very high last year but so far this year has been relatively low.

Hypothermia

Mr. Loughlin: asked the Secretary of State for Social Services if he has completed his study of the extent to which retirement pensioners are dying from hypothermia in consequence of insufficient food and inadequate heating; and if he will make a statement.

Mr. Parry: asked the Secretary of State for Social Services if he will make a statement on research into aged people dying from hypothermia directly due to lack of food and insufficient heating.

Mr. Alison: I cannot at present add to my right hon. Friend's replies to the hon. Member for Sutton and Cheam (Mr. Tope) on 6th February.—[Vol. 850. c. 57–8. 61.]

Mr. Loughlin: The hon. Gentleman is virtually saying that no progress has been made. Is it not true to say that literally thousands of aged people die from hypothermia each winter in consequence of a lack of food and heat? [HON. MEMBERS: "And lack of gas."] The gas strike has been on for only two or three days. [An HON. MEMBER: "Where have you been?"] I am talking about the situation that applies winter after winter. Will the hon. Gentleman speed up these investigations? May I put a suggestion to him? [HON. MEMBERS: "No. Ask a question."] This is a question. If the Under-Secretary finds difficulty in persuading his Treasury colleagues to give more money to retirement pensioners, will he ask them to consider the production of heat coupons in the same way as we had tobacco coupons?

Mr. Alison: The hon. Gentleman refers to the consideration by the Supplementary Benefits Commission of the so-called Fox Report. It is still giving urgent consideration to whether the administration of its discretionary power to increase benefit when there are exceptional needs, including extra needs for heating, requires any alteration.

Mrs. Knight: Would my hon. Friend consider making available a supply of

paper handkerchiefs to catch all the crocodile tears shed by Opposition Members, especially when we bear in mind that people in the West Midlands area are now in far greater danger from hypothermia because of the gas strike than from anything else?

Mr. Alison: The implications of the continuation of the gas strike must give ground for concern in this context.

Mr. John Silkin: Does the hon. Gentleman recall the British Medical Journal survey of 27th January last on body temperature in the elderly?

Sir K. Joseph: indicated assent.

Mr. Silkin: Does he recall that one of the recommendations of that survey was that the development and use of low-wattage electric blankets for people on supplementary benefit should be considered? Have any steps been taken to implement this recommendation?

Mr. Alison: We are considering every aspect of Dr. Fox's report and we are asking him to come to the Department so that we may talk to him directly and personally. Serious potential safety hazards are involved in the use of even low-wattage electric blankets.

Local Authority Social Services

Mr. David Clark: asked the Secretary of State for Social Services if, in his actions designed to promote rate restraint, he will bear in mind the need to preserve the work of local authority social services departments.

Mr. Alison: In considering the rate of growth of local authority expenditure, my right hon. Friends and I will naturally bear in mind the requirements of the personal social services.

Mr. Clark: Does the hon. Gentleman realise that many people are worried that one result of Government pressure on local authorities could be a cutback in home help and domiciliary services? Will he give the House a guarantee that he is prepared to monitor the activities of local authorities to ensure that people do not suffer from the lack of domiciliary home help and other services?

Mr. Alison: I see no prospect of any such cutback as the hon. Gentleman postulates. In fact the White Paper on


Public Expenditure lays down a substantial rate of increase in the public resources allocated to personal social services at local level between now and 1976.

Mr. Winterton: Another sphere of local authority responsibility in social service departments is the provision of Part III accommodation. Is my hon. Friend aware that in many areas this accommodation is in extremely short supply, and what action is he prepared to take to remedy this serious shortcoming?

Mr. Alison: Substantial steps are being taken. My hon. Friend will be interested to know that loan sanction approvals for homes for the elderly increased by 50 per cent. between the last year of Labour Government and last year.

Mr. John Silkin: In line with the circular sent to local authorities about the appointment of new local government social services staff, has the Secretary of State received any representations from the directors of social services since it would appear to be the almost universal impression that there is an intense shortage of trained social service workers and a growing work load?

Mr. Alison: This matter goes rather wider than the original Question. My right hon. Friend has said that he recognises the existing shortage of trained social workers. We are doing everything possible to accelerate the process. I will write to the right hon. Gentleman about representations.

Secure Accommodation (Convicted Girls)

Mrs. Renée Short: asked the Secretary of State for Social Services what progress local authorities have made with the provision of secure accommodation for girls convicted of offences.

Sir K. Joseph: I understand the hon. Member to be concerned with girls between 14 and 17 who may temporarily be remanded to a prison or remand centre if the court certifies that the girl is too unruly to be safely committed to the care of a local authority. A considerable expansion of secure accommodation for girls is in hand or projected.

Mrs. Short: Is the right hon. Gentleman aware that public opinion has been

incensed at the cases which have occurred during the last year of girls of the age he mentioned being committed to Holloway prison? Is he also aware that the Home Secretary, in reply to a similar Question that I put to him on this matter recently, said that he could not guarantee that cases of this kind would not occur in future? What has the Secretary of State to say about the situation? Can he say when the accommodation which is being prepared is likely to be ready and available?

Sir K. Joseph: Some more accommodation will become increasingly available in the next two or three years. The hon. Lady is right to be concerned about this matter, and we are providing accommodation as soon as possible.

Mr. Burden: Is it not a fact that although the girl in question to whom I think the hon. Lady refers—

Mrs. Short: How can the hon. Gentleman know what I have in mind?

Mr. Burden: —was committed to Holloway prison, she was not accepted at the prison when she arrived?

Sir K. Joseph: I am sure my hon. Friend is right about that one case, but I believe that the hon. Lady had in mind a girl who was admitted to Holloway.

Mr. Callaghan: Has the Secretary of State in mind the case of a girl about whom I have been in communication with the Home Secretary—a girl who was convicted three years ago and who at a later stage will need to be transferred to another institution? Since it looks as though that girl may have to go to prison, is it not obvious that it is time we had secure accommodation for that type of girl?

Sir K. Joseph: It is agreed that we need more secure accommodation. More is now being built and more is projected.

Private Hospital (Manchester)

Mr. Marks: asked the Secretary of State for Social Services what proposals have been made for the building of a private hospital in Victoria Park, Manchester; and if he has examined the likely effect on nursing staffing in the area.

Sir K. Joseph: I understand that the City of Manchester Planning Department


has received an application for the development of a private hospital in Victoria Park, Manchester. The commissioning of such a hospital should not, at present, affect the general situation over the recruiting of nurses in the area.

Mr. Marks: Is the right hon. Gentleman aware that there is a staffing problem and there are also very long lists of patients awaiting treatment at local hospitals? When applications are made for private hospitals to be built, does he examine the situation which that will possibly create?

Sir K. Joseph: My approval is not required for the building of private hospitals. I am concerned about waiting lists, and I hope that in the next few months I shall he giving advice to hospital authorities about how to reduce them.

Mr. Kaufman: I wish to support what was said by my hon. Friend the Member for Manchester, Gorton (Mr. Marks). Is the right hon. Gentleman aware that this project is planned in Victoria Park which is in my constituency and which is a stress area? Does he appreciate that a hospital of this kind would not be used by the overwhelming majority of my constituents because they could not afford to go there? Is he further aware that this plaything of an ex-Tory councillor would take up land which could be used for the benefit of my constituents?

Sir K. Joseph: It is for the local planning committee to weigh all the factors that are within its right to weigh. My permission is not needed for such a hospital.

Hearing Aids

Dr. Vaughan: asked the Secretary of State for Social Services what progress is being made in research with the development of hearing aids.

Mr. Alison: We are considering with the Medical Research Council an overall strategy for future research into hearing difficulties, including hearing aids. Meanwhile several small but important projects are in hand.

Dr. Vaughan: Does my hon. Friend agree that the regulations urgently need to be changed so that young people can continue to have head-worn aids under the National Health Service after they

leave school? Does he agree that that is a most important time for young people and young adults? It is a time when they most need to have something which is discreet and unobtrusive, but the present arrangements for chest aids are quite the reverse of this.

Mr. Alison: I have great sympathy with the point made by my hon. Friend. We certainly do not overlook the importance psychologically of enabling youngsters to use head-worn aids. It is for that reason amongst others that we are actively looking into the possibility of issuing head-worn aids through the National Health Service.

Mr. Pavitt: Will the hon. Gentleman introduce a little urgency into this problem in view of the fact that the report which he mentioned was published as long ago as last April? Will he do something about the aural aids which cost only about £2 more than the Medrescos and which, if developed with the help of the Post Office, would give deaf people an advantage at something like one-tenth of the commercial price they have to pay?

Mr. Alison: We are treating this matter with a sense of great urgency and enthusiasm in my Department. The hon. Gentleman knows that the question of hearing aids is closely integrated with epidemiological studies and clinical questions. One is bound to hasten slowly.

Mr. Costain: Does the current research include investigations into hearing aids that are sometimes sold to the public at high prices so that their price can be related to their efficiency?

Mr. Alison: I think my hon. Friend will know that the Consumers Association has published regular reports evaluating the benefits, advantages or disadvantages of hearing aids provided privately.

Disabled Children (Financial Assistance)

Mr. Astor: asked the Secretary of State for Social Services whether he will make a further statement as to the progress being made by the Rowntree Trust in distributing the £3 million provided starving their wives and children?

Sir K. Joseph: The trust's arrangements are now well advanced and it will be able to start receiving applications from


families on 2nd April, in the first instance from those whose children are aged between 10 and 15. It has appointed a chief officer to administer the fund and a consultative as well as a management committee to ensure that it has the necessary expert advice.
I am writing to local authorities and interested voluntary bodies giving them information about the operation of the scheme and inviting their help.

Mr. Astor: Is my right hon. Friend aware that the setting up of the fund was widely welcomed in all parts of the House? May I thank him for the further statement which he has been able to make? Is he aware that many of us feel that this sum of money—or even double this sum—is likely to be insufficient? Can he give an estimate of the number of children who will be eligible for support?

Sir K. Joseph: No, I cannot at this stage. The help from the fund is intended to complement the help available from the statutory local and voluntary services. We must wait a few months to see the demand before forming any judgment.

Mr. Carter-Jones: I accept the right hon. Gentleman's statement about the £3 million and I welcome it. If it proves, as many of us believe, to be small in relation to the problem, will the right hon. Gentleman give us an assurance that more money will be made available to meet this very real problem?

Sir K. Joseph: No. The hon. Gentleman knows that the Government must consider a whole mass of competing priorities. I cannot give that assurance.

Mr. John Hall: Has my right hon. Friend's attention been drawn to the results of recent research which indicates that an increasing number of handicapped children are being born to mothers who have previously had an abortion? If experience shows this research to be well founded, does it mean that we shall have to make available much more money than is now being made available to help such handicapped children, unless we change our policy on abortion?

Sir K. Joseph: My hon. Friend has raised a question far too technical and clinical for me. If he cares to put down

a Question I will give him as good an answer as I can provide.

Pensioners (Expenditure)

Mr. R. C. Mitchell: asked the Secretary of State for Social Services what proportion of the average pensioner's income is spent on food and heating at the last convenient date.

Mr. Dean: Information is not available in the form requested, but the latest Family Expenditure Survey data shows that about 45 per cent. of average weekly expenditure for pensioner households is on food, fuel, light and power.

Mr. Mitchell: Does the hon. Gentleman agree that the figures show that pensioners are suffering very severely from the enormous increases in food prices over the last two or three months? Is there not a need for at least the poorest pensioners to have increases in their pensions dating from 1st April of this year so that they do not have to wait until the autumn? Is there not still time for the Secretary of State to have last-minute consultations with the Chancellor of the Exchequer?

Mr. Dean: There has been a substantial real improvement in the buying power of the pension under this Government. There is now an annual review of pensions, which takes fully into account rising prices, including food prices.

Dame Irene Ward: I acknowledge everything that my hon. Friend says. However, can he tell me whether he is getting on with considering a special heating allowance? The increase in the price of coal, gas—when gas is available—and electricity is imposing a very great burden on the elderly, the sick and the handicapped. I am very anxious that we should devise some means to have a special heating allowance. I am looking forward to the co-operation of the Treasury and the Department of Health and Social Security in this matter.

Mr. Dean: I can assure my hon. Friend that we are giving very sympathetic consideration to the people she has mentioned.

Mr. Frank Allaun: While the hon. Gentleman is aware that some of us are pressing for better heat allowances, does he accept that a basic pension increase is


greatly preferable as so many people needing the extra allowances do not take them up?

Mr. Dean: That may be true of supplementary pensions in some cases. It is not true, as the hon. Gentleman is aware, of the national insurance pension. With regard to heating allowances, there is a campaign which started last autumn and which is still proceeding to bring heating allowances to people's attention and to advise them about better insulation of their houses so that better use is made of the heat which is available.

Departmental Employees (Wage Levels)

Mr. William Hamilton: asked the Secretary of State for Social Services how many civil servants within his Department are in receipt of basic wages of less than £25 a week.

Mr. Dean: About 40,380. This figure reflects the very high proportion of young clerical and executive staff. Many of that number—some 19,590—are on pay scales with a maximum above £25 a week, and they can expect to reach that figure between the ages of 23 and 27.

Mr. Hamilton: Does the hon. Gentleman agree that there are many thousands of civil servants within his Department who are on basic wages substantially less than £25 a week? Indeed, some of them in local offices give out supplementary benefits in excess of their basic wages. That is a situation which will get worse under phase 2. The people at the higher figure of £25 will get no more than a £2 a week increase, which will mean a substantial reduction in the standard of living of a man on a basic wage of £25, if he has a family, over the next 12 months.

Mr. Dean: As I explained to the hon. Gentleman, many of these people are very young and have ahead of them good career prospects. As the hon. Gentleman knows, salaries in the Civil Service reflect the salaries of comparable employment outside.

Sir B. Rhys Williams: Is not the best and the most selective way of helping people who are in need because of low wages to increase family allowances?

Mr. Dean: My hon. Friend knows that a good deal has been done in this area of family poverty, particularly through the family income supplement.

Strikers (Payment)

Mr. Dixon: asked the Secretary of State for Social Services whether he will consider legislation whereby payments made to strikers should in the first instance be payable from union founds.

Sir K. Joseph: As my right hon. Friend the Secretary of State for Employment said in reply to my hon. Friend the Member for Haltemprice (Mr. Wall) on 7th November, it is clearly right that trade unions should bear their proper share of financial responsibility for official disputes. The larger issue of which this is part is under thorough review by Ministers.—[Vol. 845, c. 799–800.]

Mr. Dixon: Is it not true that a system whereby the first call for striker's benefit should be on union funds has been practised in a number of other countries and has been extremely successful, not least in countries such as Denmark, which has a strong social democratic tradition?

Sir K. Joseph: I would welcome such a practice here being universally followed. But it is not necessarily possible to move from that to enforcing such a practice. It is one possibility that Ministers are having considered at the moment. But it is only one of them.

Mr. Michael Stewart: Does the Secretary of State agree that what is in issue in this Question is the payment of social security benefits to the wives and children of men on strike? Does he agree that it is now accepted in this civilised country that in no circumstances should the standard of life of mothers and children fall below a certain level, modest though it is, and that if in the course of an industrial dispute employers want to bash their employees they must find some other way of doing it than starving their wives and children?

Sir K. Joseph: I do not think that the right hon. Gentleman has the issue correct at all. The issue is, while fully respecting the right to strike, whether the payment of benefits to the wives and


children of strikers marginally or more than marginally influences the number of strikes disproportionate in their effect on the public to the grievance of those concerned.

Local Offices

Mr. Hardy: asked the Secretary of State for Social Services if he will ensure that the views of local authorities and communities are sought and considered before any arrangements are made to close local offices of his Department.

Mr. Dean: It is normal practice for my Department to notify local authorities of any change in local office arrangements some time before the reorganisation takes place.

Mr. Hardy: In that case, will the hon. Gentleman offer an explanation and some apology to the Urban District Council of Maltby which has learned that the local office has to be closed although no consultations have taken place?

Mr. Dean: I apologise to the hon. Gentleman and to the urban district council. There was an oversight in this case. I can assure the hon. Gentleman that it is intended to retain a full-time inquiry office at Maltby to deal with questions about social security.

Emergency Dental Service

Mr. Edward Lyons: asked the Secretary of State for Social Services if he will set up an emergency dental service in all major centres of population; and if he will make a statement.

Mr. Alison: I would refer the hon. Member to my right hon. Friend's reply to my hon. Friend the Member for Wycombe (Mr. John Hall) on 14th November last.—[Vol. 846, c. 72.]

Mr. Lyons: Does not the hon. Gentleman consider it to be illogical that whereas at night, at weekends and at holiday times facilities exist for the relief of pain in other parts of the body there are none for the relief of dental pain? Is the hon. Gentleman aware that dental pain can be not only excruciating but persistent? Will he take urgent action to provide a nationwide service at these times for the relief of dental pain?

Mr. Alison: Hitherto, it has been the view that a real need for a comprehensive

emergency service for dental patients did not exist. However, we have asked the Working Party on Dental Services to look at this matter again in view of representations like those of the hon. Member. Anyone suffering from dental pain or a dental emergency can, of course, get treatment at hospitals, as the hon. Gentleman knows.

Dr. Summerskill: Does the hon. Gentleman recognise that the British Dental Association is pressing for an emergency service? Will he bear in mind also that it is becoming increasingly difficult for people to obtain not only an emergency service but ordinary dental care under the National Health Service because dentists are opting out of the dental service to go into private practice? Can the hon. Gentleman say when the Working Party on Dental Services is likely to report?

Mr. Alison: I am afraid that I cannot answer the last part of the hon. Lady's supplementary question about when the working party will report. Obviously the British Dental Association is itself taking part in it. The working party will consider all the matters that the hon. Lady has raised.

Mr. John Hall: In view of the representations being made to my hon. Friend, may I ask whether he recognises that there is a real need for an emergency dental service? Furthermore, following the supplementary question asked by the hon. Member for Halifax (Dr. Summerskill), does my hon. Friend also recognise the need to strengthen the existing service?

Mr. Alison: It is precisely because we recognise that circumstances may have changed since the Estimates Committee reported in 1962 that we have asked the working party to look at the situation again.

Disability Income

Sir B. Rhys Williams: asked the Secretary of State for Social Services if he will now publish a Green Paper on the proposal for a disability income.

Miss Fookes: asked the Secretary of State for Social Services if he is now able to make a statement following the review by his Department of provision for the disabled.

Sir K. Joseph: The possibilities and priorities for further improvements in cash provision for the disabled are being studied. But there is a great deal more work to be done and I have no proposals to put forward at the present time.

Sir B. Rhys Williams: Does my right hon. Friend agree that Members in all parts of the House now accept the need for a disability income and that we look to him to provide specific recommendations about procedure, the numbers likely to be affected and the likely cost?

Sir K. Joseph: Certainly the Government are studying all the proposals made in connection with disability, but it is still true that I cannot make proposals at this stage.

Miss Fookes: Will my right hon. Friend bear in mind the plight of the disabled who are able to earn very small incomes but cannot afford national insurance contributions and then find that they cannot qualify for existing benefits because they are told that they have not made contributions?

Sir K. Joseph: I share my hon. Friend's impatience but I hope she will appreciate that whereas three years ago no money was paid out to the civil disabled, for civil disability we shall have reached under this Government an additional annual cash pay-out, as well as improving the services, of £100 million by the end of next year.

Mr. Molloy: Is the Secretary of State aware that a number of voluntary organisations like the Disablement Income Group have supplied him with a lot of material which they have researched themselves and that in all fairness we should be looking forward to a White Paper rather than a Green Paper? Cannot the right hon. Gentleman say that he accepts the principle and that an appropriate measure will shortly be introduced?

Sir K. Joseph: I greatly respect the DIG, but I do not necessarily accept all its conclusions.

INDUSTRIAL RELATIONS

Mr. Norman Lamont: asked the Prime Minister whether the public speech of the Secretary of State for Employment

on 16th February at Farnham on industrial relations represents Government policy.

The Prime Minister (Mr. Edward Heath): Yes, Sir.

Mr. Lamont: Although under the voting procedure of yesterday's special TUC conference there was a majority in favour of action against the Government's pay policy, and although individual trade union members will now feel themselves under some pressure to follow that lead, since rank and file trade union members were not consulted is not it the case that there is no reason to believe that yesterday's vote was widely representative of the trade union movement?

The Prime Minister: I cannot comment on the situation of individual unions. But what my hon. Friend said was reflected in the comments of many of those at yesterday's meeting.

Hon. Members: Have a ballot.

Mr. Grimond: Is the Prime Minister satisfied with the effects of the Industrial Relations Act on the present round of strikes?

The Prime Minister: As for the operation of the Act on individual union members, it is being used more and more and greatly to their benefit. From the point of view of the present unofficial action or what might be called "day" action—the short strikes—I do not think that the Industrial Relations Act is affecting them very much. If people have proposals to make for its amendment, I have constantly made it clear that we are prepared to consider them. So far we have not had any proposals either from unions or from employers.

Mr. Churchill: Will the Prime Minister make it clear that nothing is doing more to depress the value of the pound and consequently to put up food prices than the current industrial unrest? Will my right hon. Friend emphasise that there will be no surrender to those politically-motivated militants who seek to defy the will of Parliament by indulging in a vicious round of community-bashing directed specifically against the sick and the elderly?

The Prime Minister: This is a matter that we have discussed with the TUC and


with employers on previous occasions. Any industrial action which affects the pound, as it is likely to, is working against their own interests because a lower pound is bound to push up the price of food. It is therefore defeating the objective of those using it. It is true that no one will gain a penny from the present industrial unrest. Many will suffer, some very grievously. A solution to these problems has been put forward already. As for the National Health Service ancillary workers, they can have their increase in pay next week. It is due next week. They have been offered an increase of £2 a head for every man and £1·80 for every woman. For women there is an additional sum payable in October to take account of the movement towards equal pay. Surely everyone in this House must ask himself whether it is justifiable to cause this damage and suffering to people in hospitals.

Mr. William Hamilton: Will the Prime Minister tell the House why the provisions of the Industrial Relations Act have not been invoked against these so-called militants? Does he regard the nurses in the National Health Service as militants because, for the first time in our history, they are now threatening to strike? Does he regard them as Left-wing Communists?

Mr. Heffer: "Community bashing" was what that idiot on the Government side said.

The Prime Minister: I can make no comment about that or about individuals who are at the moment urging strikes or taking part in them. The pay increase of the National Health Service ancillaries would be the second largest they have ever had, and it is available to them next week. It is £2 for men and £1·80 for women, with the additional payment towards equal pay in the autumn. Therefore, I do not believe that it can possibly he justifiable for any reason to cause anxiety and suffering to people in hospital.

ECONOMIC POLICY

Mr. Meacher: asked the Prime Minister if he will place in the Library a copy of his public speech at Birmingham on 16th February on economic matters.

The Prime Minister: I did so on 16th February, Sir.

Mr. Meacher: The Prime Minister was unwise to mention that the Government are taking the opportunity to exploit North Sea gas and oil. What is he doing to stop what has been publicly exposed as the most gigantic spree of palpable deception by Ministers at the taxpayers' expense? What is he doing to recover the £1,500 million of tax losses and to renegotiate the fourth round of licensing when the oil companies made their biggest gains ever and made the British Government look absolute fools?

The Prime Minister: The hon. Gentleman is hopelessly out in his statement. As the oil has not yet been produced, obviously there have been no profits and there will not be any for another two years. He must wait for the Government's comments on the report by the Public Accounts Committee.

EUROPEAN ECONOMIC COMMUNITY

Mr. James Lamond: asked the Prime Minister if he will make arrangements to meet the Heads of Government of the other EEC countries to discuss future financial policy.

The Prime Minister: Heads of Government already meet as occasion requires. In addition there are regular contacts both among Finance Ministers and among officials.

Mr. Lamond: Is the Prime Minister in favour of moving more quickly towards European monetary union? If not, what is he going to do about the floating pound which is now drifting like a ship without a rudder?

The Prime Minister: The summit communiqué set out the agreement of all Heads of Government, which is to move towards economic and monetary union by 1980. Perhaps the hon. Gentleman will await the speech by my right hon. Friend the Chancellor of the Exchequer.

PRIME MINISTER (ENGAGEMENTS)

Mr. Skinner: asked the Prime Minister if he will now answer Questions about his future engagements.

The Prime Minister: It is not my practice to list in advance my general programme of engagements, but I regularly answer Questions about whether I will undertake specific engagements.

Mr. Skinner: Does the Prime Minister think that today is the most appropriate time to announce that he will revisit the scene of the crime by taking a trip back to Selsdon? Then, like a dog, he could eat his own vomit.

Mr. Rost: Do my right hon. Friend's future engagements include a visit to this House tomorrow so that he may congratulate and welcome back the hon. and learned Member for Lincoln (Mr. Taverne)?

The Prime Minister: I shall continue to carry out the happy customs of this House on the arrival of a new Member.

GERMANY

Mr. Marten: asked the Prime Minister if he will make a statement on his visit to Germany.

The Prime Minister: I had talks with the Federal German Chancellor on 1st and 2nd March during my official visit to Bonn. We discussed a wide range of subjects including currency matters, the implementation of the programme laid down at the Paris summit and Community external relations. Herr Brandt and I also signed an intergovernmental agreement to establish an Anglo-German Foundation for the study of industrial society.

Mr. Marten: On the question of the summit meeting and its conclusions, may I ask my right hon. Friend whether he made it clear to the Chancellor that the expression so often used in 1971 and 1972—that we would go as far and as fast as the Six towards monetary union—cannot now be our policy, because surely it would be a mistake to have a settlement of monetary matters under the shadow of the present crisis?

The Prime Minister: The point about the summit meeting was that the Heads of Government agreed about the pace at which they would go on all the different matters of policy which were agreed.
I cannot agree with my hon. Friend on the last part of his supplementary ques-

tion. Often when countries, either together in Europe or in the IMF, have to deal with a crisis, then is the opportunity to work out a solution which is not possible at other times.

BLOXWICH AND WILLENHALL

Mr. Stonehouse: asked the Prime Minister if he will pay an official visit to Bloxwich and Willenhall.

The Prime Minister: I have at present no plans to do so, Sir.

Mr. Stonehouse: Is the Prime Minister aware that householders in this area, as elsewhere, face a 25 per cent. increase in domestic rates? When does he expect to make an announcement about his review of the position?

The Prime Minister: I do not think that the right hon. Gentleman will have very long to wait.

GOVERNMENT OFFICES (DISPERSAL)

Mr. Edward Taylor: asked the Prime Minister if he has completed his consideration of the Hardman Report on the dispersal of Government offices; and if he will make a statement.

The Prime Minister: I refer my hon. Friend to the reply which I gave to my hon. Friend the Member for Middlesbrough, West (Mr. Sutcliffe) on 22nd February.—[Vol. 851, c. 173.]

Mr. Taylor: Is my right hon. Friend aware that Scotland, which has had severe emigration of graduates and trained people over the years, is now looking forward to this report with enthusiasm? We hope that substantial numbers of offices can be moved. May I ask whether, when the job is completed, consideration can be given by a similar committee to the possibility of moving some of the jobs and headquarters of nationalised industries?

The Prime Minister: My hon. Friend will appreciate that this is a very important report and obviously contains a great amount of detail. We undertook from the beginning to discuss it in all its aspects with the staff side because, as


I have told the House before, we must recognise that this report makes a very important impact on the lives of civil servants and their families, particularly on their children at school. I will consider whether, after this matter is completed, we might deal with various aspects of the nationalised industries, though obviously their relationship with the Government is different.

Mr. Bagier: If the right hon. Gentleman is genuine in his desire for the Civil Service to move outside London, may I ask how he equates that with the removal of the Department of Births, Marriages and Deaths from Somerset House to Knightsbridge?

The Prime Minister: I have already explained that the present review is concerned with those dealing with policy matters who therefore have to be within close communicating distance, whether physically or by other means of communication, with Ministers to meet the needs of Parliament. This explains the complexity of the present review and why we are giving so much attention to its substance.

MINISTERIAL BROADCAST

Mr. Bidwell: asked the Prime Minister if he will arrange for a copy of his ITV broadcast and interview on Thursday 22nd February on Government policies to be placed in the House of Commons Library.

The Prime Minister: I did so on 26th February, Sir.

Mr. Bidwell: While thanking the Prime Minister for making that available, may I remind him and the House that in that broadcast he alluded to national average earnings being about £35 a week? Is he aware that averages are very misleading? Millions of people in this country are in receipt of incomes far lower than that. The hon. Member for Southall has received correspondence in terms of bitter anguish requiring him to make known the feelings of people in receipt of incomes of £20 and £25 a week, to point

out that the Government's prices and incomes code does nothing to rectify this serious position, that the formula of El plus 4 per cent. has nothing to do with the question whatever, that we must consider—[HON. MEMBERS: "Too long."]—not so much low-paid jobs as low-paid industries and that the Prime Minister's formula moves away from doing something seriously for the low-paid workers?

The Prime Minister: I agree with the hon. Gentleman on the misunderstanding of many people, which has also been shown in my correspondence, about average industrial earnings. Of course, to take au average means that a large number of people are below that figure as, indeed, a large number of people are above it in industrial earnings. The point that I was using and have used before was to show that, for example, on rent rebates, the new arrangement which we have made will enable everybody up to average earnings not to pay more even after the increase under stage 2 of the policy. It was certainly justifiable to use it in that way. However, I agree that whenever an average figure is quoted, by its very nature there must be a number below as well as above.

Sir Gilbert Longden: Will my right hon. Friend tell the House how very many pay settlements have already been made within the guidelines of phase 2?

The Prime Minister: A considerable number have been made, I agree. I can let my hon. Friend have the details if he would like to have them, or publish them in the OFFICIAL REPORT. The major ones of course have been notified to us and we know about them.

NEW MEMBERS

The following Members took and subscribed the Oath:

Giles Heneage Radice, esquire, for Chester-le-Street.
George Machin, esquire, for Dundee, East.

WAYS AND MEANS

BUDGET STATEMENT

Mr. Deputy Speaker (Sir Robert Grant-Ferris): Before I call the Chancellor of the Exchequer, it may be for the convenience of hon. Members if I remind them, that at the end of the Chancellor's speech, as in the last five years, copies of the Budget Resolutions will not be handed around in the Chamber but will be available to hon. Members in the Vote Office.

INTRODUCTION: ECONOMIC STRATEGY

3.34 p.m.

The Chancellor of the Exchequer (Mr. Anthony Barber): The central objective of the Government's economic strategy is to maintain a faster rate of growth of national output. And a key part of that strategy must be to control inflation. There are no other means, no economic devices, no fiscal formulas for achieving the prime purpose which every hon. and right hon. Member of this House shares—to improve the living standards of all our people.
The twin theme of our strategy therefore is this—expansion and the attack on inflation. I start with expansion.

Expansion

The primary objective of last year's Budget was to set our nation on a course of faster economic growth. I said then that the aim was that our national output should increase at an annual rate of 5 per cent. over the eighteen-month period to the present half-year. There are still some months to go but the indications are that we shall broadly achieve that objective. Indeed, in the closing months of last year industrial production, consumers' expenditure, and retail sales all showed increases over a year earlier of considerably more than 5 per cent. And the indications are that a rapid pace of expansion is being maintained this year.

At the time of the last Budget I said that no Government could tolerate the level of unemployment which we had at that time. The facts of the past year are these. At the last count on 12th February the number of unemployed was over 200,000 lower than a year earlier. And the number of vacancies was over 100,000

higher—nearly twice as high as a year ago.

The very fact that our national output has been growing rapidly over this past year or so has been one of the principal reasons why, last year, living standards—measured in the conventional terms of real personal disposable income—rose faster than in any year since the end of the war. Whatever the problems ahead—and there are plenty—our nation starts this year with a standard of living which is about 10 per cent. higher in real terms—that is, after allowing for inflation—that it was when we came to office.

There is, I know full well, a sharp contrast between these very real achievements—in increased production, improving employment, and a higher standard of living—and the frustrations which are so often expressed.

And the reason, I think, is two-fold. First, our progress has been made up of a very large increase in money incomes, offset in part by an increase in prices. It is all too easy to look at price increases and not to take into account the fact that the increases in pay have been greater.

The second reason is this. Over a period, the improvement in most people's real income has taken place in steps—when they have got their pay rise. But from then until their next rise they have seen their gain in part whittled away by rising prices—the inevitable result of the large pay increases of others, and sometimes, I may say, of their own. This has obscured the fact that, taking one year with another, pay has gone up much more than prices.

Not only does inflation create injustice as between one individual and another. It also binds us, as a nation, to our real achievement. Instead of satisfaction it breeds resentment. There is only one way of removing the causes of this attitude, and that is by attacking inflation itself.

I turn now to the future. We have achieved our first objective—to lift the economy on to a path of higher growth. My aim in this Budget, looking ahead over the next year or so, is to continue on that path.

But it is well recognised that the faster rate of growth we are now achieving depends partly on taking up slack in the economy. If this faster growth is not to be a transitory affair, and if we are


to succeed in our long-term objectives, three conditions must be fulfilled.

First, there must be a higher level of industrial investment. This is required to increase our sustainable growth of productivity, to improve our international competitiveness, and to provide sufficient capacity to re-employ more people so that unemployment can continue to decline.

Second, we must not find ourselves compelled to bring growth to a halt in order to deal with difficulties which ought to be tackled in other ways, whether those difficulties are concerned with inflation or with the consequences of inflation for the balance of payments. Indeed, we have consistently affirmed that sound and sustained growth is a major element in our programme of action to deal with inflation.

Third, we must conquer inflation. The battle against rising prices is crucial not only in its own right because inflation is bad, unfair and socially disruptive; but also because our success or otherwise will have a major impact on confidence at home and abroad. Without confidence at home there will be insufficient investment and reduced prospects for sustained growth and for the achievement and maintenance of a high level of employment. As for confidence abroad, there would be no soft options for an economy which allowed itself to become uncompetitive. Pressures on sterling would be intensified by lack of confidence and would lead in one way or another to a depreciation of the exchange rate which in turn would exacerbate the inflationary spiral.

I will be dealing later and in detail with each of these pre-conditions for growth. But it is right that I should say at the outset that I believe they can be met.

One thing that has made a great impression on me was our experience in the 1960's. In those years the prosperity of our nation was improving more slowly than that of most other advanced countries. This was due, above all, to our failure to match their economic performance. So the standard of living of the British people fell further and further behind those of other countries, and we were getting into a frame of mind where it was almost assumed that we did not

have it in us, as a people, to do as well as others. Our self-confidence was sapped, and the very fact that our economic performance had been poor led to social tensions which would otherwise have been avoided.

But I just do not believe that we are innately less capable that are those other countries of achieving a better economic performance. What they can do, we can do.

And so, on the economic front, the strategy of this Budget, like that of its predecessors, will be to keep the economy growing, and to keep it growing over the next year or so at a rate comparable with that we have now achieved. But as I have said on earlier occasions, it is crucially important to look beyond the next year and to lay firm foundations on which we can build a fast rate of economic growth in the future. We have had spurts of fast growth before and they have always either petered out or been brought abrupty to an end because we have not taken the proper measures to ensure that they could be sustained. We are determined not to let this happen again.

THE ATTACK ON INFLATION

I now come to my second main theme—the attack on inflation.

At the time of the Budget a year ago, we had had a considerable measure of success in moderating the rate of increase of both pay and prices. But by the summer that trend was being sharply reversed, and it was against that background that the Government entered into the tripartite talks with the TUC and the CBI.

The breakdown of those talks made it essential for the Government to take statutory action. By October and November last year both average earnings and hourly wage rates were running 15–17 per cent. above a year earlier and, in spite of the restraint exercised by a large part of British industry, including the nationalised industries, the October retail price index was nearly 8 per cent. above a year previously. The standstill introduced on 6th November was essential to provide a breathing space and to reverse the upward thrust of pay and prices.

The Government's policies for the next stage of the attack on inflation are expressed in the Bill which is now before


Parliament and in the Consultative Document on the Price and Pay Code which we debated yesterday.

This Budget is based on the determination that these policies shall succeed: and that success is crucial to all the nation's hopes for steadier prices and rising prosperity.

The country has cause to be grateful for the efforts to restrain prices which most of British industry was already making before the standstill, as a result of the CBI initiative. It may seen onerous that there should now be a further period under which companies are asked to do their utmost to absorb cost increases, with the back-up of a profit margin control. But industry stands to gain with the rest of us from sustained economic growth and the investment which it requires and stimulates. There is no bar whatever to increased earnings either from exports or from the bigger turnover on the home market which growth will make possible. And we certainly have no intention of impeding investment. By making it less easy to pass on increased costs and by asking that the benefits of increasing productivity be passed on in prices, we are reinforcing competition, not working against it.

The objectives of the counter-inflation policy—faster growth, steadier prices and more help for the lower paid and the pensioners—are all common ground between the Government, the TUC and the CBI. I therefore still hope very much that the TUC, as well as the CBI, will join in the wide-ranging consultations on the drafting of the Price and Pay Code. If the TUC cannot see its way to do this, the result will be a loss to the community in general and to its members in particular. I repeat that the Government are ready at any time to resume discussions with the TUC.

It is not given to those involved in public affairs always to form a unanimous view as to what should be done, but I do not think it can be said that we have been unreasonable in our attitude. We have given prority to rapid economic growth. We have held down nationalised industry prices. We have made massive reductions in taxation so as to increase employment. We have already increased old-age pensions proportionately more than ever before. We have provided relief

on rents, and relief on rates. [HON. MEMBERS: "Oh."] We have given special help to the low paid. All these are major items of policy where we have taken action in the national interest, and where that action has coincided with the requests and recommendations of the TUC.

Under stage 2, with particular emphasis on the need to improve the position of the lower paid, we are permitting pay increases which would be considered large on any normal reckoning. Of course, I fully realise that intervention in the cycle of pay settlements creates anomalies between different groups. But to have allowed inflation and rising prices to continue without check would have been far more unfair. And we have made it clear that for stage 3, starting this autumn, we shall ask the Pay Board to make recommendations for tackling some of these anomalies.

The Pay Board's inquiries during stage 2 will enable it to get an overall measure of these problems. During this stage it will be expected, on the basis of its knowledge of the whole range of cases, to advise on the ways in which these problems should be dealt with within the framework of stage 3. It will be on the basis of that advice that the Government will consult the two sides of industry and Parliament on the revision of the code for stage 3.

TAX REFORM

Before I return to the immediate issues of economic management, it is right that I should make some general observations about our strategy for taxation and tax reform.

Since we came to office, we have reduced taxation on a scale unprecedented in our history. Taxation as a proportion of gross domestic product has been cut from 35 per cent. to 30 per cent.

In the field of taxation reform it was decided, right at the outset, that it was no longer enough merely to tinker with the system, patching it up here and changing it there. The right course, we decided, was to make a complete and thorough-going review of three main areas—the taxation of income, the taxation of expenditure and the taxation of companies.

On the first, the taxation of income, the old dual system of income tax and surtax is being replaced next month by a new unified tax, simpler, more logical, and easier to understand. That reform is complete.

On the second, the taxation of expenditure, the purchase tax and the selective employment tax are being replaced next month by the value added tax, with a single standard rate. That reform is complete.

On the third, the old corporation tax is being replaced next month by a new style corporation tax allied to a simpler and more generous system of investment incentives than we have ever had in this country before. That reform is complete.

In less than three years, we have tackled not one tax but the whole framework of our tax system. I would like to express my gratitude to those in all parts of the House who have contributed to the detailed legislation but, in particular, to those on this side who, by their support, have made these reforms possible. All these reforms will be in full operation next month. To those who complain of the inevitable problems of transition, my reply is that to avoid those problems is to eschew all fundamental reform. I have no doubt that the changes which come into operation next month, coupled with the unprecedented cuts in taxation, will make a significant contribution to a more dynamic economy. What is now required is to give the new system the opportunity of settling down.

It is right, therefore, that I should add—no doubt to the relief of those who bore the brunt of two of the longest Finance Bills in our history—that so far as the traditional system of taxation is concerned, these reforms are for the time being complete.

But outside and beyond the traditional framework of our tax system are the proposals for a tax credit system which I announced to the House last year. The case for the tax credit system rests not upon narrow arguments relating to administrative advantage, great though they are, but upon a broad case of philosophical considerations. When we took office we felt that the first task was to reform the present tax structure and to reduce taxation, for only in this way could we lighten the dead hand of exces-

sive taxation which had rested too long on our community, stifling incentive, curbing enterprise and penalising thrift.

But successive Chancellors—or at any rate those who have reduced income tax, whether by cuts in the rates or by increasing the allowances—have been acutely conscious that cuts in direct taxation cannot help people who do not pay tax; and by definition the people who do not pay direct taxation are the poorer members of the community—the low paid, the pensioners, large families, particularly those with young children, and so on.

The tax credit system—which is a logical extension of our existing tax system—is specifically designed to help these people: and in so doing it will buttress the social security system in a way which channels help to people without individual means-testing and without the problem of take-up. It was in this spirit that the new system was proposed. It was in this spirit, I am sure, that it was welcomed on all sides of the House.

The scheme is now being examined by a Select Committee of the House. This will be one more case, I believe, where the process of reform will benefit greatly from the more open government which the Green Paper approach facilitates, and from the contribution of a Select Committee.

There is, however, one point which I should add. This concerns the payment of child credits. The House should know that the Government will not adopt any arrangement which leaves mothers being paid less than they are at present.

EXTERNAL DEVELOPMENTS

I turn now to external developments.

Last September the Committee of 20 was set up by the IMF to advise and report on all aspects of reform of the international monetary system.

This was particularly gratifying to the United Kingdom, because of the lead which successive Chancellors have consistently given to the reform of the old international monetary system—particularly my right hon. Friend the Member for Barnet (Mr. Maudling) and the right hon. Member for Cardiff, South-East (Mr. Callaghan) as well as myself. This is work, the urgency of which has been increased by the strains on the existing


system which have been experienced this year.

We have already debated in this House the course of events leading up to the dollar devaluation of 12th February. As I said during that debate, nothing could have emphasised more starkly than those events did, the paramount need for a more efficient monetary system.

We were able to achieve last month—and with remarkable speed—a set of moves which, I have no doubt, has established an exchange rate for the dollar against other currencies at which the United States economy will be fully competitive in world markets and which would, in due course of time, provide the United States with a strong balance of payments. Yet the exchange markets did not settle down and were again acutely disturbed just before this last weekend. Consultation started almost immediately. The purpose of that consultation is to ensure that trade and production, whether on a worldwide scale or a European scale, are not strangled by the sort of disruption which has been experienced in the foreign exchange markets.

I do not think that any previous Chancellor has found himself attending an international conference of major importance two days before delivering his Budget or has been faced with having to be abroad for further discussions for three more days before the Budget debate has ended. I know the House will appreciate the reason if I reluctantly have to miss some parts of the debate—[An HON. MEMBER: "You will be very lucky."] Perhaps I might interject here that when I explained to some of my colleagues in Europe that attending the meetings would create great difficulty for me because I would have to miss part of the Budget debate, they made much the same observation.

Although these are matters of great importance and urgency, there is no crisis affecting our own currency. Sterling has not been under pressure. What we are having to deal with is the international payments system as a whole.

Our discussions this week will include countries other than those in the Nine, and our objective will be to try to agree on action on a worldwide basis. Last Sunday, in the meeting of the EEC Council, a number of ideas were put

forward for dealing with the situation. These included, as is well known, the possibility of a joint float by the European currencies as a means of protecting European countries from extreme speculative pressures and of ensuring that the development of the European economic system is not distorted by movements in relative exchange rates in Europe which are not related to underlying economic realities.

With regard to the proposal for a common float, I said that a number of conditions were essential in the interests of the Community as a whole in order to ensure both that a common float could come into existence and that it could endure. In the current economic situation, these were the only conditions which would guarantee that the collective float could succeed and they were therefore in the interests of all the other countries concerned as well as of the United Kingdom.

Those conditions are: first, the starting pattern of central rates must be acceptable to each member in terms of its immediate economic problems.

Second, each member must have an unimpaired right to change its central rate after consultation with the Council of Ministers.

Third, we must all be prepared to grant support without limits of amount, without conditions, and without obligation to repay or to guarantee. Only the knowledge that support is unlimited and does not impose impossible burdens on the receiving countries can make the system proof against short-term capital flows of the magnitudes now experienced. This is an essential condition for the whole Community; and certainly the United Kingdom could not join in a collective float unless it is met in full.

Fourth, some, at least, of the support should be interest-free.

Fifth, the pattern of exchange rates established in connection with a joint scheme should not lead to an immediate increase in food prices for the United Kingdom and any necessary increase should be spread over a long period.

On this basis the arrangements proposed would have three positive advantages for the United Kingdom, in addition to the advantages for Europe inherent in the scheme itself. The


advantages for the United Kingdom would be these: first, they would enable us to maintain an exchange rate at a level which would help the attack on inflation by keeping down import prices.

Second, the rate structure would be supported by the resources of the whole EEC and would be secure against speculation.

And, third, the United Kingdom would be effectively insulated from the perennial risk presented by our widespread sterling liabilities.

Such arrangements would, of course, represent an important step towards Economic and Monetary Union.

But a collective float is only one of a number of solutions which are being considered this week, and it remains to be seen which of the various ideas will emerge as the agreed line of action in the wider group. This is not an esoteric exercise, nor is the work of the Committee of 20. Decisions taken in these conferences vitally affect employment, prices and national prosperity.

The Finance Ministers of the EEC will be considering proposals for the reform of the system at a meeting later this month, and the Committee of 20 will be meeting again in Washington in the following week. I am sure that by the time we meet at the IMF in Nairobi in September we can and should reach agreement on the main framework of a plan for reform on the basis of which we can take practical decisions.

Details of the balance of payments outturn for 1972 are published today. We had a small surplus on current account, with the deficit on visible trade slightly more than offset by the further large surplus from services and income from abroad.

The House will recall that in my Budget Statement a year ago, I said that the balance on visible trade would be less favourable as imports increased with the pick-up in domestic demand. On the other hand there was a general expectation—not only in this country but in organisations such as the OECD—that world trade would become more buoyant. In the event world trade was sluggish. This was especially so in primary producing countries, on whose markets we particularly depend.

THE ECONOMIC OUTLOOK

Balance of Payments

I turn now to the outlook for the coming year, and first to the balance of payments. I should at the outset make it clear that last month's currency re-alignments should not have a significant effect on our current balance. As last year, I expect to see a substantial overall surplus on services like shipping, banking and insurance, and from income from overseas investment. This surplus is at present running at an annual rate of about £700 million. It is expected to continue at broadly this rate, and this is after allowing for the initial payments to the EEC budget. This surplus will offset much of the visible trade deficit which is likely to persist through the year.

In this connection, it is particularly important to bear in mind that the exceptionally high current surpluses in 1970 and 1971 reflected low domestic demand and high unemployment. It was wholly predictable that high growth and falling unemployment should lead to a growing volume of imports. But as industry becomes geared up to higher output and home supplies increase, the rate of increase of import demand should ease, especially because the pattern of growth of demand is likely to be more even than last year, with less emphasis on cars and consumer durables, and with demand on the heavy engineering industries, where there is most slack, beginning to pick up.

Furthermore, there are now strong signs that the recovery of world trade is under way. The beginning of this expansion was reflected in our export performance in the second half of last year. Although overall volume growth was modest we increased very substantially the volume of our exports to the faster growing and highly competitive markets of Western Europe. Between the two halves of last year the volume of our exports to EEC countries rose by over 5 per cent. This year the recovery in world trade should be more widely spread, and recent increases in world market prices of food and basic materials will eventually be reflected in an increased demand for imports by the producing countries.

British industry is now exceptionally well placed to seize the opportunities provided by this situation. The productive


capacity is available, and the movement of sterling since last June has improved the competitiveness of our exports.

It has also improved the competitiveness of United Kingdom goods on our home market compared with imports from overseas. As these changes work through they will make a direct contribution to a more fully employed economy and to an improvement of the trade balance by curbing the volume of imports and increasing the volume of exports.

It is obviously desirable to ensure that the capital outflows which are necessary—for example to provide for aid and investment in less-developed countries and for export credits—are offset to an adequate degree by inward capital flows. The House will know that, after the excessive inflow of dollars in 1971, we withdrew exchange cover facilities for foreign currency borrowing by certain public sector bodies. Similar facilities will now be restored and the Government will accordingly consider applications in appropriate cases.

Reserves

I should also remind the House that despite the outflow in those few days last June, before it was decided to float the £, because we did not hesitate to act, our reserves are still more than twice as large as they were in June 1970 and, of course, since then we have repaid the whole of the short and medium-term official debt, amounting to nearly £1,500 million.

The Domestic Economy

I come now to the prospects for the domestic economy. As I said earlier—and I think this is generally accepted—the economy is now on a growth path of around 5 per cent. a year. Looking ahead over the next year or so I believe that this rate of around 5 per cent. will be maintained, with most elements of demand sharing in the expansion.

The growth of consumers' expenditure, though below the exceptionally rapid rate of the past year, should still be high by past standards. In saying this, I have taken account of a rising level of employment and of the provisions for pensions and other benefits which will come into effect in the autumn.

For reasons I gave earlier the volume of exports should rise much faster than last year and the volume of imports more slowly.

It is, I think, generally agreed that there is likely at some stage to be a marked increase in investment in stocks, which was very low last year, although the time path of stockbuilding is notoriously hard to predict. This, too, will contribute to the growth of total demand and activity.

The forecast path of public expenditure on goods and services is for a relatively rapid growth up till about the middle of this year, after which there is a marked slowing down.

By contrast industrial investment is expected to grow at an accelerating rate from now on.

Budget Judgment

One of our major objectives must be to ensure that this rise in investment comes about and is maintained, because on this depends our prospect of achieving sustained growth at a high rate and with a high level of employment.

As a result of the changes we have already made, we now have in the United Kingdom a more generous system of national incentives for industrial investment than in any member country of the enlarged Community or in the United States. Furthermore, I reaffirm the intention that the new system of investment incentives should endure at least until the end of the EEC transitional period, that is 1st January 1978.

With these exceptional incentives already in operation, I have no doubt that the most effective way to encourage a higher level of investment is to pursue a policy which industry and commerce know will result in a sustained rate of growth of demand. This means aiming at a growth of demand over the next year or 18 months which is sufficiently high to maintain a steady movement towards the full use of our productive capacity, but not so extravagantly high that when all the slack has been taken up we have to change gear abruptly and so damage confidence in the prospect of sustained expansion.

In the light of all these considerations I have come to the conclusion that


the Budget should on this occasion be broadly neutral. I believe that on this basis the economy will continue to grow at an annual rate of around 5 per cent. over the 18 months from the second half of 1972 to the first half of 1974.

I must stress, as my predecessors have, that this is a "central forecast" and subject to the many uncertainties to which, as every former Chancellor knows, such predictions are necessarily subject. For this reason, I shall if necessary not hesitate to act at any time of the year, in whatever direction the economy may require, on expenditure, on taxation or on monetary policy.

PUBLIC EXPENDITURE AND MONETARY POLICY

Public Expenditure

There has recently been much discussion about the trend of public expenditure. There are two aspects to be considered—the medium term and the short term.

First, the medium term. In the recent White Paper, we estimated that the average rate of growth in demand terms of the programmes as a whole up to 1976–77 would be 3 per cent. to 3½ per cent. a year. On any reasonable assumption about the future growth of the economy this rate of increase should be acceptable.

Next, the short term. In order to help to bring spare resources into use and to bring unemployment down, public expenditure has been deliberately increased during the period 1971–72 to 1973–74. Part of this increase has taken the form of specific additions to programmes concentrated on the regions, and those additions run down rapidly after the coming financial year 1973–74.

But much of the other additions to expenditure which will continue beyond 1973–74 is also helping to deal with the particular problem of regional unemployment. And a significant part of the continuing increase in expenditure, as compared with the previous year's White Paper, has been due to substantially higher pensions, which I have yet to hear criticised in any quarter. Looking ahead to the total picture after this coming financial year, 1973–74, the White Paper shows the planned rate of growth of public expenditure coming down to only 1·5 per cent. to 2 per cent. a year.

In my judgment, the situation does not demand precipitate cuts in public expenditure. Nevertheless, as we move closer to full employment, it becomes increasingly important for us to get the right balance between the different claims on the national output. The House should know three things.

First, the main Supply estimates for the coming financial year, 1973–74, are now more than £130 million below the corresponding total in the White Paper. In addition to this—also in respect of 1973–74—there is likely to be a substantial reduction on the White Paper provision for the capital expenditure of the nationalised industries, bringing the total reduction in the two items to over £200 million.

Secondly, the Select Committee, in a report last July, said that
the use of public expenditure to correct short-term deficiency of demand is an essential element of policy".
I accept that without reservation, but it is equally the case that, if circumstances warrant it, public expenditure should be cut back. Effective action requires proper preparation, with continual need for contingency work. And so, when last year the Government completed their review of the programmes, this contingency work was at that time put in hand. But lest anyone should jump to conclusions, I should say that this is not a hint of things to come. It is only common prudence.

Thirdly, my colleagues and I are in any event determined that, having now achieved the faster rate of growth of the economy, as we set out to do, there will be the strictest control of expenditure, both on existing policies and for any new proposals.

Monetary Policy

I turn now to recent monetary developments and to monetary policy. A year ago I warned the House that the high growth of output I intended to sustain would entail a growth of money supply which was also high by the standards of previous years.

As I predicted, the growth of money supply has indeed been fast by either of the more commonly used conventional meausures, that is, MI, which consists of currency in the hands of the public and


current accounts held by private sector residents in United Kingdom banks, or M3, which adds in the corresponding interest-bearing deposit accounts.

But it is sometimes overlooked that the movements of these figures can be influenced by considerations which have no general economic significance. For instance, the structural changes in the banking system introduced by the far-reaching reforms of 1971 have increased the rôle of the banks as financial intermediaries at the expense of other institutions whose activities are not included in either the MI or M3 measurements.

The rapid growth of certificates of deposit is a major instance of this. After the severe pressures on company liquidity in 1969–70 it was highly desirable that companies should add to their liquid assets. They have done so and they have also found it convenient to hold much of their short-term assets in certificates of deposit with the banks, and this has caused M3 to rise.

Moreover, in the conditions of 1972, individuals as well as companies increased their savings and added substantially to their money balances. This is another way of saying that the response of demand to the many measures taken by the Government to expand the economy was slow until the second half of the year, and that money balances were built up rather more than I had expected.

Towards the end of 1972, however, when there were clearer signs that real demand was expanding, I thought it right to take action to prevent the liquidity of the banking system from leading to an over-rapid expansion of credit and hence of demand in the months ahead.

Short-term interest rates had been allowed to rise sharply during the currency outflow in June, and the banks were subsequently asked to ensure that they had sufficient resources to meet the needs of industry and, as necessary, to make credit less readily available to property companies and for financial transactions.

In the autumn there came a change in money market arrangements with the introduction of the more flexible "minimum lending rate", This improved the authorities' techniques for influencing short-term market rates, which are in turn under the new system one of the principal

mean of influencing the growth of bank credit.

Towards the end of the year, there were two calls for special deposits, totalling 3 per cent. in all, to get the reserve base of the banks and financial houses on a tight rein by sterilising £700 million. This curtailed the ability of the banking system to expand credit.

As a result of all these developments money interest rates have risen substantially over the past year. Interest rates are at the heart of monetary control, but in conditions of changing prices it is misleading to look at them solely in nominal terms. The rate of inflation determines the real amount of any particular rate of interest, and therefore the consequences of the rate of interest for the decisions taken by individuals and companies. And the important point is this. Because expectations about the future rate of inflation are a major factor in determining the level of interest rates, the success of counter-inflation policies is crucial to improvements in this sphere as in others.

In the coming year, as I shall explain shortly, the public sector borrowing requirement will be high. With real demand expanding, the objective must be to prevent this large borrowing requirement from leading to too rapid a growth of money supply. I therefore intend to take action at once to ensure that, to the maximum extent, the Government's borrowing requirement is met by means which do not increase the money supply.

Before I deal with the measures I have in mind, however, I should comment on the development of the Governmnt borrowing requirement in the past year and its probable size in the year ahead, and the implications of this for economic and monetary policy.

Borrowing Requirements

At the time of the Budget last year I expected the public sector borrowing requirement for 1972–73 to be £3,358 million. In the event it is probable that the figure will prove to be some £500 million less than the Budget estimate.

There is one important aspect of this matter which is often misunderstood. Over the past year, notwithstanding the size of the borrowing requirement, very little of it has in fact been financed


through the domestic banking system. About £1,200 million net of public sector debt has been sold to the non-bank public, and of the remainder of the borrowing requirement about £1,600 million was financed by a running-down of foreign exchange reserves, most of which occurred in June last year.

By contrast, the private sector made very large demands on the banking system, and the increase in money supply, broadly defined, was almost equal to the banks' lending to private-sector borrowers. I think it right to put the public sector borrowing requirement into its proper perspective and to scotch the idea that it, and it alone, was responsible for the large growth in money supply last year. That was not the case. Indeed in 1972 the public sector made net repayments of debt to the banks.

Coming now to the year ahead, the borrowing requirement will be increased by some £800 million as a result of the once-for-all change in the timing of tax receipts and payments which arise from the new system of indirect taxation. But, as I shall explain, the effect of this £800 million on the claims on resources should be very small. However, including this £800 million and on the basis of my Budget proposals, I expect the public-sector borrowing requirement to be £4,423 million.

But it is important to recognise that this in no way resembles a current deficit. The increase in prospective borrowing does not come about because the public sector is raising insufficient revenue to cover its current expenditure. Indeed the reverse is the case. The public sector is expected to have a surplus of revenue over current expenditure in 1973–74 of £3,223 million, which is some £260 million greater than in 1972–73.

I should add that the substantial increase in the borrowing requirement arises only partly from the public sector's own current and capital expenditure. Two other factors are equally important.

The first is the Governmnt's rôle as a source of finance for third parties—export credits, finance for industry, and so on. The second factor is the one I have referred to—the very substantial change next year, not in overall tax liabilities, but in the timing of tax collec-

tion. This is the biggest single factor accounting for the rise in the borrowing requirement and it is, of course, unique to this particular year. As a result of the new arrangement for collecting VAT there will be a temporary interruption of the flow of revenue from indirect taxes, which will mean that the borrowing requirement in 1973–74 will be some £800 million more than it would have been if SET and purchase tax had continued. Of this, £112 million is due to the ending of the SET "forced loan" by industry.

This is a once-for-all change and does not alter the underlying tax liabilities as distinct from the timing of revenue receipts. Because of this, its effect on the claims on resources should be very small.

Nevertheless, the large borrowing requirement in 1973–74 poses a considerable financing task for the authorities. It would be quite unacceptable to rely to any substantial extent on borrowing from the banking sector.

GOVERNMENT FINANCE AND SAVINGS

General

I am therefore determined that a sustained effort shall be made in the coming year to sell Government securities to the non-bank domestic public. To do this, it will be essential that the terms on which Government securities are made available remain fully competitive. I therefore have a number of immediate proposals which I do not doubt will increase the attraction of gilt-edged stock, national savings and other Government securities for investors. There are in particular three sectors of the public which will be in funds this year and to which Government obligations must be available on the right terms.

Company Sector

First, there are the industrial and commercial companies, whose liquidity next year will be considerable, partly because of the exceptional delay in the collection of taxes and partly because company expenditure on new capital equipment may not catch up with company income until later in the year. The need to do something to appeal to companies has


become particularly clear in recent months as company liquidity has steadily been channelled into bank deposits, so contributing to the growth in the money supply.

To some extent the fiscal system has itself contributed to this development because under existing tax law the interest element on the sale of certificates of deposit held by non-financial institutions escapes liability to tax. I propose with immediate effect to remove this anomaly and give the public sector a chance to compete on equal terms with the banks for company funds. Gains on sales of these certificates will be made liable to corporation tax, or income tax in the case of an individual holder, and the new charge will apply to gains on certificates acquired after today.

But I intend to go further. A new facility will be made available to all incorporated businesses. With effect from 1st April companies will be able to open accounts, which will be operated by Inland Revenue Collection Offices, into which they can deposit surplus funds. If these funds are subsequently applied to the payment of a company's mainstream corporation tax liability, the interest credited on them will be the average Treasury Bill rate for the period of the deposit plus a bonus of 2½ per cent, a year. If, on the other hand, the funds are withdrawn, the bonus will not be paid and the interest will be simply that payable on Treasury Bills. I believe that corporate treasurers will find these tax deposit accounts a useful medium for employing liquid funds, preferably in anticipation of a tax liability but with no substantial penalty if they are needed for other purposes.

Stock Issues

Secondly, there are the big financial intermediaries through which much personal saving is channelled. I refer to the life insurance companies, and the pension and provident funds. These bodies naturally look to the gilt-edged market as an important outlet for their funds. Two new stocks will be issued.

The first will be a convertible stock on terms which I believe will have considerable appeal for institutional investors. The issue will be of £1,000 million with a coupon of 9 per cent. and an issue price of 99½. The initial stock will mature in 1980; but at that point, lenders will

have the option of converting the initial stock into a new 9 per cent. stock maturing in the year 2000, and of accepting £110 of that new stock for every £100 of the initial stock. The yield to maturity over the full 27 years will be about 9·6 per cent.; but investors will, of course, have the option of repayment at par in 1980 if that is what they prefer.

Second, there will also be a further new issue to help meet the steady demand from investors for stocks of a low coupon. There is some evidence that, for this type of stock, the balance between supply and demand is now such that large purchases have a disproportionate effect on price, with an unsettling effect on the market. The position is being aggravated by the fact that two further 3 per cent. stocks mature on 1st April. There will therefore be a new issue of £400 million, maturing in September 1979, with a coupon of 3 per cent. and an issue price of 75.

National Savings

Next, there is the personal sector. The encouragement of personal saving in all its forms is a major objective of Government policy, and we have recognised this in the changes which we have already made in the system of personal taxation. A high level of saving is important for a number of reasons. In the first place, it provides the funds out of which the nation's investment needs can be financed, and in this way it contributes to the achievement of steady and sustained growth.

Secondly, saving brings security and independence for the individual. Thirdly, as successive Chancellors have pointed out, savings and taxation are in a very real sense alternatives. The more people save, the less Chancellors have to tax them. To be more specific, the most recent figures for total personal savings show that in the first three-quarters of last year, they were nearly £600 million higher than they were in the corresponding period of the year before. This meant that, given our objectives for the growth of the economy, the need for taxation was at least £600 million less than it would otherwise have been.

Within the total of personal savings, National Savings are of particular significance in present circumstances. As a source of Government borrowing, they are


an important factor in the fight against inflation.

Once again, over this past year, National Savings have been highly successful. Although in recent months the flow of National Savings has no doubt been affected by the general rise in interest rates which has added to the competition for funds, at the end of January the amount held by the public in all forms of National Savings was over £10,000 million, some £800 million more than a year earlier.

At this point I want to pay tribute to the dedication of the members of the voluntary savings movement under the leadership, in England and Wales of Sir Robert Bellinger, and, until he retired recently after seven years in office, of Lord Birsay, who was Chairman of the National Savings Committee for Scotland. This tribute is no mere formality, for those men, and the Savings Committees under them, are a remarkable example of voluntary service.

As the House knows, I have already taken some action to ensure that good progress is maintained. In particular, the rates of interest in the ordinary and investment departments of the Savings Banks were recently increased.

I expect to receive very shortly the Report of the Committee to Review National Savings which I set up two years ago under the chairmanship of Sir Harry Page. I do not want to propose too many extensive changes in National Savings when that report is so near to completion. On the other hand it is essential that the range of National Savings facilities should remain fully competitive, and I am therefore making the following changes.

First, the maximum permitted holding of the decimal issue of National Savings Certificates will, from tomorrow, be increased from £1,000 to £1,500. This will provide the opportunity for additional investment to those people already holding the present maximum.

Second, there will be a new issue of British Savings Bonds with improved terms. The new bond will be sold in multiples of £5, will have a life of five years and a maximum holding of £10,000. In these respects there is little change from its predecessors. The rate of interest, however, will be increased from 7 per cent. to 8½ per cent. with a tax-free bonus

on maturity of 3 per cent. The new bond will be on sale by about the end of May.

Third, Premium Bonds, by adding ⅛th per cent. to the rate of interest, it will be possible to double the weekly prize money. In addition to the existing prizes, therefore, there will, from July, be a further 25 prizes of £1,000 each, every week. Bonds bought this month will be in time to qualify for the July draw. With all the other prizes, the total prize money going to Premium Bond holders will then be £50 million a year.

Fourth, I have decided that a depositor with an account in the ordinary departments of the National Savings Bank or the Trustee Savings Banks should be able to hold up to £1,000 without incurring any income tax liability on the interest earned. The exemption limit will accordingly be raised from £21 to £40. This increase in the exemption limit will come into operation for the year of assessment 1974–75, but will effectively cover interest received in 1973–74 in all those cases where, as is usual for accounts continuing over a period of years, the liability for any year of assessment is based on the amount received in the preceding year.

Taking account of all these measures—the new tax deposit accounts, the new long-term stock, the new low-coupon issue and the new arrangements for National Savings—I expect during the coming year a considerable increase in the net sales of Government obligations of one sort or another to the non-bank public.

Share Savings Scheme

National Savings are, however, only part of the picture. We also need, if we are to achieve sustained growth, to encourage more people to save and invest in British industry.

Last year we introduced legislation to regulate employees' share option and share incentive schemes. But most existing schemes have been prepared on the basis that participation is offered only to senior staff. In any event, the terms of many schemes would make them unattractive to other employees. What is wanted is a wider share-ownership scheme which will encourage companies to make it possible and practicable for each and every one of its employees who wants to,


to acquire a real stake in the company for which he works. The necessary provisions for a new "Share Savings Scheme" will, therefore, be included in this year's Finance Bill.

The new arrangements will enable any any company with an approved scheme to offer, to all its regular full-time workers not already covered, the chance to buy shares on specially favourable terms. Indeed these arrangements will make it possible for schemes to be operated so that an employee can save up through Save As You Earn in order to buy shares for as little as 70 per cent. of the normal price ruling when he joins a scheme, but still retain the option, at a later date, either to take up his shares at a profit, or alternatively—if he changes his mind—to keep his savings in cash.

These schemes will work in this way. First, the shares will be bought by the employee from Trustees on the special terms available, but no substantial payment will be required at the outset. The employee will provide the purchase money for his shares by means of regular Save As You Earn payments.

Second, the employee's SAYE contributions under such a scheme will be limited to £20 a month, which will enable him to acquire shares costing up to £1,680. But if the company prospers, the value of the shares is likely to be greater when the SAYE contract matures.

Third, the increase in the value of the shares will not attract any liability to tax until they are disposed of, when the usual capital gains tax rules will apply. The SAYE rules will be revised to permit anyone who already makes the maximum SAYE contributions to join a scheme of this kind.

Fourth, there will be protection against a fall in the value of the shares during the saving period because there will be the right to opt out of the share purchase when the SAYE contract matures and instead to keep the cash proceeds.

The result is a scheme which combines the attractions and incentives of employee share schemes with the security and bonuses of SAYE. It is a further step towards wider share-ownership. It will enable all those who participate to share in the prosperity of their company—to take up their shares at a profit—but

always with the safeguard that, if they change their mind and decide not to take them up, there is absolute protection against losing their savings.

ESTATE DUTY

Date of Valuation

I turn now to taxation, and first to estate duty. Last year I made major changes which provided substantial relief from estate duty for bequests to widows and charities. They were widely welcomed.

The House will also recall that at the time of the last Budget we published a Green Paper on a possible inheritance tax, and comments were invited. I am grateful to the numerous bodies and associations, as well as individuals, who have made their views known. The change to an inheritance tax obviously have very important and far-reaching implications concerning the disposition and devolution of property, and it is therefore right that the Government should take time to consider these important questions.

There is, however, one reform, not too costly, which will be made this year. This concerns a rule which has been a constant source of complaint.

Ever since the introduction of estate duty nearly 80 years ago, it has been the general rule that assets must be valued as at the date of death. This rule has been considered on a number of occasions, but the conclusion hitherto has always been that it could not be changed. This has been so despite the fact that it can cause real hardship if executors are compelled to sell quoted shares or securities some time after the date of death when the Stock Exchange quotation has fallen. The result is that estate duty is paid on a valuation which is higher than the actual sale value of the shares. In certain circumstances this can actually mean that the duty exceeds the realised value of the shares. This is clearly inequitable.

New rules will therefore be introduced. These will apply to shares and securities quoted on a recognised Stock Exchange and to holdings in authorised unit trusts. Where such investments have been charged to estate duty, executors, or other persons accounting for duty, who realise them within 12 months of the


death, will, subject to certain safeguards, be able to claim that the total of the sale prices should be substituted for the total of the date of death values of the investments realised. The cost of the relief will depend on the movement of Stock Exchange prices, but it is likely to be about £2 million in 1973–74. The new rules will apply in relation to deaths occurring after today.

National Heritage

I should also mention one other change in estate duty which, although comparatively minor, is important to protect our national heritage. The Finance Act 1930 allows a wide range of objects of historic or artistic value to be exempted from estate duty. In addition, under the Finance Act 1956, the Government can accept an individual outstanding work of art in payment of estate duty. It was thought in 1969 that historic documents were covered by the 1956 Act as well as the 1930 Act. Subsequent legal advice has shown that this is not in fact the case. To put the matter right, the two Acts will be aligned so as to enable the same categories of objects to be accepted in payment of estate duty as can already be exempted from duty.

The necessary steps will be taken to apply these two estate duty changes to Northern Ireland.

COMPANY TAXATION

Corporation Tax

I now turn to corporation tax. The new system of corporation tax for which we legislated in last year's Finance Bill comes into effect next month—in April. As from then, the old system will no longer be operative. As the House knows, however, corporation tax is paid in arrear. It follows therefore that in this Budget it is necessary to fix the rate for the financial year 1972, the last under the old system. There will be no change in the present rate and it will therefore remain at 40 per cent. for the financial year 1972. Next year the rate will re-sect the change in the system, but it is too early yet to reach a decision as to what the appropriate rate will then be.

As far as the structure of the corporation tax is concerned, the Finance Bill

will provide two significant changes affecting groups of companies. These are the outcome of consultations between the Inland Revenue and representatives of industry.

I was urged last year by a number of important groups of companies, and in particular those with large overseas interests, to make more flexible the provisions under which companies may surrender advance corporation tax to their subsidiaries. The problem was that I could not contemplate any relaxation in the treatment of groups unless I could also take action to counter certain artificial manipulations of the group relief provisions involving in effect the sale of capital and other allowances at a discount. This abuse was spreading rapidly and there was reason to fear a possible loss of tax of the order of £100 million a year.

We have now found a solution to deal with this problem. This is another instance of the value of the kind of consultation, at professional level, which we have tried constantly to foster in the programme of taxation reform. The changes will be described in detail by my hon. Friend the Chief Secretary later in the debate.

Last year much consideration was given and rightly so, to the position of unquoted companies under the new tax system. I have looked again at the possibility of devising a transitional scheme of relief for such companies. But the hard fact is that any scheme of this kind would inevitably be costly: to give a significant degree of relief across the board could well entail a cost of £75 million in the initial year. The House will understand why I cannot contemplate a cost of this order in present circumstances.

Offshore Oil and Gas

I come now to two further important changes concerning business taxation.

Under the law as it stands at present the United Kingdom sector of the Continental Shelf is outside this country for the purposes of taxation. The result is that profits from exploration and exploitation of the resources of the Shelf are normally liable to United Kingdom tax only if they are earned by an enterprise which is resident in the United Kingdom. This follows because a resident


enterprise is liable to tax on all its income from any source throughout the world. But under the present law profits which a non-resident enterprise makes from such operations on the Continental Shelf are not liable to tax here unless made through a branch in this country.

This situation is no longer justifiable. All profits from exploration and exploitation of the United Kingdom sector of the Continental Shelf will therefore be brought within the charge to United Kingdom tax. At the same time employments on the Shelf which in many cases have been outside the scope of United Kingdom income tax, will become chargeable to tax under the normal rules.

The Public Accounts Committee last week drew attention to the probability that the yield of tax to the British Exchequer from the North Sea profits may in the case of many of the companies be seriously impaired by the setoff of artificial losses made by those companies from their trade in oil from other parts of the world, and it recommended that the Government should take action substantially to improve the effective tax yield from operations on the Continental Shelf.

I am sure that the Committee was right, and I accept this recommendation. The House will wish to know how these artificial losses arise. The companies producing oil in the Middle East and elsewhere sell the crude oil at what are called "posted prices". These prices are largely dictated by the governments where the oil is produced. But these "posted prices" are considerably higher than normal commercial prices and the broad effect of these arrangements, therefore, is to produce an artificially inflated profit in the producing country which the government of that country can tax, and a corresponding artificial loss in this country which under the existing law is available for relief against other profits.

Up till now this has been a theoretical rather than a practical problem as there have been little or no other profits against which the losses could be set. But the situation will be quite different with the profits from North Sea oil. If we are to safeguard our position we must take action. The magnitude of this problem can be judged from the fact that the losses which have already accumulated amount to £1,500 million. This means

that, unless we make a change, the first £1,500 million of profits from North Sea oil would effectively be exempted from corporation tax. And this in its turn might well mean that, as the PAC observed, we should get little tax revenue from North Sea oil production even by 1980.

To implement the recommendation of the PAC it is therefore necessary to deal both with the new losses and with those which have already accumulated. The PAC Report makes special mention of two techniques for this purpose. First, for dealing with current losses which arise from the use of artificial prices it would be possible to prescribe an alternative administered price for United Kingdom tax purposes. Second, the accumulated losses could be segregated so that they were set only against future profits from the existing business and not against profits from the Continental Shelf.

I agree with this approach and propose to follow it. In the normal way I would have legislated in this year's Finance Bill. But the issues involved are complex and it is therefore in the general interest to have full consultations with the industry first to ensure that the legislation takes full account of the practical problems involved.

Profits from North Sea oil will probably not arise until 1975 so that deferment of the legislation should not create difficulties. But in any event I wish to make it clear that the Exchequer must not suffer as a result of any delay caused by the need to consult. The legislation will therefore provide that the new arrangement to prevent current losses will apply to the current trading year of the companies; the arrangements for accumulated losses will apply to any losses which had arisen for tax purposes up to the end of the companies' last accounting period.

The PAC also pointed out that under the present arrangements the Exchequer's share of the "take" from oil operations on the Continental Shelf is substantially less than is obtained in other countries. As I have already said, profits from North Sea oil will probably not arise until 1975, but I can assure the House that the Government already had under consideration the other important questions affecting licensing terms and the Government's


"take" from operations on the United Kingdom Continental Shelf to which the PAC has drawn attention.

PERSONAL DIRECT TAXATION

Turning now to personal taxation, there is one particular matter on which I should briefly report to the House. This past year has seen the beginning of the end of post-war credits. Thanks to the special arrangements made by the Inland Revenue, this has been a remarkably trouble-free operation, despite the fact that the credits relate to a period beginning more than 30 years ago. Since last April, about £130 million, including interest, has been paid to 3¼ million people, mostly to those who produced certificates but, since 1st January, also to those who—like myself—had mislaid them.

Next, one matter consequential on unification. The Finance Bill will provide that the investment income surcharge shall apply to all income of trusts that is or may be accumulated. A beneficiary who receives income from such a trust and is not himself liable to the surcharge will be able to reclaim it in the same way as he can reclaim basic rate tax.

The yield from this change is estimated to be £5 million in a full year.

I come now to a change concerning the dependent relative allowance. It has long been the practice that the full allowance is given for maintaining a dependent relative whose only income is the basic National Insurance retirement pension or other income of an equal amount. In consequence there have in the past been frequent changes in the dependant's income limit as pensions have been increased. Now that there is a review of pensions every year the changes would be even more frequent. The traditional practice will therefore be formalised so that instead of fixing the dependant's income limit in figures it will be stated as a general principle that the full allowance will be due if the dependant's income is no more than the amount of the basic pension at any particular time. The purpose, of course, is to ensure that a person contributing to the support of a relative does not have his or her tax

allowance reduced as a result of an increase in the pension.

Next, the age exemption. The purpose of this exemption is to recognise the special position of the elderly. The limits will be raised so that no married couple, where either spouse is aged 65 or over, will pay any tax on an income of £1,000 or less. For any single person, aged 65 or over, the new limit will be £700. The cost of this will be £7 million in 1973–74, and £12 million in a full year.

The new unified system of personal taxation will come into effect on 6th April, but there is one matter left over from the old system, and that is surtax for 1972–73, the last year for which it will be imposed. There will be no change in the starting point or rates. As far as the new unified system is concerned, all the rates were provisionally fixed last year. Those rates will stand.

I have no hesitation in saying that I believe that most people will consider top rates of 75 per cent. for earned income, and 90 per cent. for investment income, to be quite high enough. These top rates are still significantly higher than in almost all other developed countries.

I see that the Federal Republic of Germany has recently imposed a 10 per cent. temporary surcharge on higher incomes. Even with that, the top rate in Germany will still be only 60 per cent.

It is, at this stage, relevant to remind the House that, taking all the changes in taxation which have been made since we came to office, taxation has been reduced in the current year by over £3,000 million.

Of this nearly a quarter represents reductions in taxation on spending—in purchase tax and SET.

The balance represents reductions in direct taxation. Some of this has gone to industry—with the object of encouraging investment and creating jobs. But most has gone to individuals. The greater part of this represents the big increases in the income tax allowances, which cost over £1,000 million. First, the increased allowances for children and then, last year, the biggest increases ever made in the married and single allowances—giving everyone remaining liable to tax a flat rate tax reduction of £1 a week.

Two facts are beyond dispute. First, taking the whole of the changes in personal direct taxation, 80 per cent. of the total has gone to people with incomes of less than one-and-one-half times the average adult manual wage. Second, the tax threshold—the point at which people start paying tax—has been raised, not just in money terms, but in real terms. For example, since we took office, the threshold for a married man with two young children has been raised by 8½ per cent. in real terms. It is perhaps not without significance that, taking the period 1964–70, the tax threshold for the same family was lowered, in real terms, by no less than 12 per cent.

LAND HOARDING CHARGE

In the White Paper on the second stage of the counter-inflation policy (Cmnd. 5205) it was stated that the Government intended, before the next stage of the policy comes into operation, to bring forward proposals concerning building land.

Accordingly, my right hon. Friend the Secretary of State for the Environment will be making a full announcement before the end of this month. But there is one important legislative change, the details of which will be in that announcement, which I should outline now.

It is generally accepted that the recent increase in the price of land has been due to the failure of supply to catch up with demand. It is also self-evident that there is no point in taking any step which would either lead people to withhold from the market land which would otherwise have been made available or which would lead to an even steeper increase in prices, or both. I have no doubt that—however superficially attractive to deal with an emotive situation—an increase in the capital gains tax on land transactions would do just that.

It would put up the price of land, just as the now defunct betterment levy put up the price of land. The hard fact is that additional taxation would simply aggravate the situation. I should mention, incidentally—it is sometimes overlooked—that all gains from speculative land transactions by individuals are already taxed at the full income tax rates ranging up to 75 per cent. from next month, or in the case of companies are subject to corporation tax.

The only effective way, in both the short and the longer term, of tackling the price of housing land is to make more land available for building. A number of steps have already been taken, but it is necessary also to take action to prevent the hoarding of building land, because this contributes directly to increased prices,

After consultations have taken place with the local planning authorities, legislation will therefore be introduced to penalise, by a special land hoarding charge, any unjustifiable delay in developing land which is the subject of planning permission for housing.

The charge will be levied for failure to complete the permitted development within a specified period appropriate to the land in question. That period will be extended only in special circumstances.

The charge will be levied on the full market value of the property as on the day immediately after planning permission was granted or, in the case of land with planning permission granted before my right hon. Friend makes his announcement, on the value on that day.

The charge will begin to accrue day by day from the end of the permitted completion period by reference to a fixed percentage of the full market value.

The charge will be secured on the land itself and will be collected by the Inland Revenue.

RATING REVALUATION

There is one further matter concerning land and housing. The Government are to take action to help those domestic ratepayers who face big increases in rates due to revaluation. Revaluation itself is both fair and necessary, but because the 1968 revaluation was shelved, the relative changes in the rateable values of different properties are much bigger this year than a quinquennial revaluation would normally have produced.

After discussion with the local authority representatives, the Government therefore propose to phase the effects for those hardest hit by meeting half the cost above 10 per cent. of any increases in domestic rate bills in 1973–74 which are attributable solely to the effects of revaluation We are assured that the local authorities can readily implement this. The cost to


the Exchequer is estimated to be at least £10 million.

The Government have already agreed to provide Rate Support Grant in England and Wales at a level higher than ever before, and have done so particularly to ease the position of the domestic ratepayer. The additional help I have just announced will help those hardest hit by revaluation. There will be a proportionate addition to Rate Support Grant in Scotland.

My right hon. Friend the Secretary of State for the Environment will be amplifying this later today.

INDIRECT TAXATION

VAT rate

Next month purchase tax and SET will be abolished and be replaced by VAT. In last year's Finance Act, the standard rate of VAT was provisionally fixed at 10 per cent. The House will recall that in our debates last year it was suggested by hon. Gentlemen opposite that I had it in mind to use the powers which I then took to fix the initial standard rate of VAT at 12½ per cent. Fortunately that is neither necessary nor appropriate. There will be no change in the provisional figure, and the standard rate of VAT will therefore be 10 per cent. The rate of car tax was also fixed at 10 per cent. in last year's Act, and it will remain at that figure.

I should add that, if we had decided to collect the same amount of revenue as at the higher rates of purchase tax and SET, which existed when we took office, we should have had to fix the rate of VAT at 15 per cent. Instead, as a result of the massive cuts in indirect taxation which we have already made since June 1970, the 10 per cent. rate will be the lowest standard rate in Europe.

Revenue Duties

It is convenient next to deal with the revenue duties.

In accordance with the arrangements for joining the E.E.C., protective duties charged on imports from the other member countries will be progressively reduced and finally abolished. The relatively small protective elements in

the customs revenue duties will therefore be reduced by one-fifth in respect of imports from the E.E.C. in accordance with the timetable set out in the Treaty of Accession. The Treasury will be empowered by order to make the further adjustments to these duties required by the Treaty, beginning on the 1st January 1974.

Next I deal with the question of those goods liable to revenue duties which from 1st April will also be chargeable with VAT at the standard rate. They are alcoholic liquor, tobacco, matches and mechanical lighters. The basic rates of these duties will be abated by such amounts as are necessary to secure from the goods concerned broadly the same total revenue—that is from revenue duty and VAT combined—in 1973–74 as would have been obtained solely from the existing rates of revenue duty.

It follows from the decision to abate the revenue duties fully to offset the introduction of VAT that stocks which are held by registered VAT traders, and which have paid duty at the higher rates, will qualify for relief, to the extent of the abatement, under the stock rebate scheme which has already been announced, and to which I turn next.

Transitional Arrangements

Last November I announced proposals for avoiding double taxation on goods which have been acquired before VAT comes into force on 1st April, but which are sold by a registered VAT trader after that date and so attract VAT. The transitional problem arises when such goods have borne either purchase tax, or one of the revenue duties which will be abated to take account of the introduction of VAT.

The rebate scheme has been widely welcomed by the trade interests concerned, and as a result of the scheme there will be no excuse for increasing retail prices on the argument that traders need to recover purchase tax or revenue duty as well as VAT on goods in stock on 31st March.

Government Action on Prices and Publicity Campaign

This leads to the action we are taking to safeguard the consumer, first, by special powers in the Counter-Inflation


Bill which is now before Parliament, and, second, by a major campaign of newspaper and television advertising starting next week.

In the Counter-Inflation Bill we are taking special powers to ensure that, where the yield of VAT is less than that of the purchase tax and SET which it is replacing, the cuts in taxation will lead to prices being reduced in line with the tax reduction, and that, where the reverse is the case, any price increases will be no more than is strictly justified by the tax change.

Mr. Denis Healey: I wonder whether the Chancellor could clear up one point which his right hon. Friend said that he would deal with today? In fixing the legitimate amount of retail price under the value added tax, will traders be expected to take account of constant percentage margins of profit or of constant cash margins of profit, because, as the Chancellor knows, this will make all the difference in many cases?

Mr. Barber: I am coming in a moment to the discussions we have had with the retailers. What I can say is that the situation will be entirely different from that which dealt with decimalisation where the Government had no powers of any kind. Even when this special provision comes to an end, there is no question of a free-for-all—that is, when the special powers end—because prices will continue to be subject to the strict control provided for in the Bill.
The newspaper and television advertising campaign will begin next week. We have had extensive consultations with representative trade bodies, in order to work out with them patterns of price changes which will be both commercially realistic for retailers and acceptable to the Government as correctly reflecting all the tax changes—the abolition of SET and purchase tax as well as the introduction of VAT. All this has, of course, been on the provisional basis of last year's Finance Act. The trade organisations could not have been more co-operative with the Government.
I am grateful also to those consumer bodies and others who have already published fair and balanced forecasts of price changes, on the basis of the pro-

visional rate of VAT. Some newspapers and magazines in particular, have in this respect performed an invaluable public service.
From some other quarters, there have been totally misleading statements about the consequences of the changeover from purchase tax and SET to VAT—some of them, I am sorry to say, made in this House.
What we shall do, therefore, in this newspaper and television campaign is to give the nation the facts. We shall give the housewife clear information about how the changeover will affect her.
We shall set out in newspaper advertising and in leaflets a list of more than 150 main items of consumers' expenditure, and show how as a result of the tax changes their prices are likely to move. If any member of the public finds that prices in a particular shop have changed in a way which is out of line with this Shoppers' Guide he or she will be able to complain to the Weights and Measures Inspectorate—[Interruption.]—as we were requested by the TUC to do during the tripartite talks—who will be empowered to investigate whether the retailer has properly reflected the tax change in his prices.

Charities (VAT and Covenants)

VAT and Charities

As a result of consideration in the course of the year, there will be two changes concerning VAT and charities—one comparatively minor and the other of considerable importance to those running charity shops.

One of the points to which some charities have attached importance is that goods exported by a charity, for example to assist the victims of an overseas disaster, might bear VAT. This is not what was intended, and an order will be laid which will ensure that all exports by a charity are zero-rated.

Perhaps the greatest anxiety about the effects of VAT on charities has been in respect of sales of donated goods by charity shops. The many voluntary workers in these shops are being increasingly successful in raising substantial sums for deserving causes.

In the light of advice from a number of charities, I have decided that the best course is simply to zero-rate the sale in


a charity shop of all goods, both new and used, which have been given for resale to a charity established for the relief of the distressed. There will be no limit to the relief in respect of the value of goods donated by private individuals, and the relief will extend to gifts from stock by registered traders up to the statutory £10 limit for business gifts. The necessary order will be laid today. This change will be of very great help to charity shops and I am sure it will be welcomed by the charities concerned.

Covenants

There is one further matter concerning charities which it is convenient to deal with at this point. It arises as a result of the new system of unified income tax.

Under the new system, charities which receive income under covenants for a net sum—that is a covenant which expresses the amount to be paid as a fixed sum after deduction of tax—will receive a smaller repayment of tax because the new basic rate tax of 30 per cent. is less than the old standard rate tax of 38·75 per cent.

This is, of course, a problem which has arisen whenever the standard rate of income tax has been cut. Nevertheless, I have received many representations that the resulting cut in the income of charities will create considerable difficulties for them, because they are committed in the coming years to expenditure which they had expected to be financed out of covenants made before the 30 per cent. basic rate was announced in 1971. New covenants need of course cause no problem, because they can take account of the change. I believe that the charities have a convincing case.

There will therefore be a scheme of transitional relief for charities which should relieve them of their difficulties. Under this relief, charities making tax repayment claims in respect of charitable covenants will be able to claim a supplementary payment for the four years from 1973–74 to 1976–77. This payment will be based on the tax repaid to them in respect of net covenants for the year 1971–72. For 1973–74 it will be the difference between that amount and what would have been repaid had the standard rate been 30 per cent. in 1971–72: for

1974–75 it will be 75 per cent. of that difference: for 1975–76 50 per cent. and for 1976–77 25 per cent. These payments—which will be borne on a special subhead of the Inland Revenue Vote—are estimated to cost about £3 million in 1973–74 and some £7½ million in all.

I should perhaps add that there is no case for continuing payments of this sort indefinitely. The reason is that most covenants are for seven years, and that by 1977–78 almost all payments will be under covenants made in the knowledge of the new system, which those entering into covenants will have been able to take into account.

The House may know that the National Council of Social Service has circulated a report which assesses the effect of the various changes in taxation which I made in last year's Finance Act. The Council selected a sample of 95 charities, but they did not all respond. However, 52 provided information which, in the view of the Council, was sufficient for the survey. Of those 52 charities, 42 were charities engaged in the relief of the distressed. While I must, in fairness, say that I do not accept some of the assumptions on which the report is based, the House should know that even on the assumptions and conclusions of the National Council itself, with the changes which I have just announced, those 42 charities will, overall, gain next year.

The concessions to charities which I have made last year and this year are substantial. It has sometimes been suggested that charities should not be expected to bear VAT at all. But it has never been accepted by any Government that charities should be relieved of all indirect taxation, and they have always borne purchase tax on the goods they have purchased.

Taking into account the estate duty and capital gains tax concessions I made in last year's Budget and the concessions which I have just announced, there can be no doubt that the net benefit to charities as a whole substantially outweighs the cost of the changeover to VAT. Taking full account of the changeover to VAT, the cost to the Exchequer of the concessions to charities which I have made in these last two Budgets is estimated to be of the order of £20 million in 1973–74.

Young Children's Footwear

In the course of last year's debates, I promised to set up a Committee to consider the special problems of VAT and children's shoes. That committee, under the chairmanship of Mrs. Alison Munro, was asked to consider to what extent the price of children's footwear contributes to the incidence of foot abnormalities, if it is possible and desirable to define approved standards of footwear for young children, and if so to explore ways of encouraging the wearing of footwear to these standards.

The committee's report is being published today. When hon. Members have had an opportunity to study it, I am sure that they will join with me in congratulating and thanking Mrs. Monro and the members of her committee for producing such an excellent and wide-ranging report.

The report recommends that there should be prepared a standard for young children's shoes, which would include basic minimum design features. In the long term, relief from VAT should apply, not to children's shoes generally, but only to shoes conforming to this standard and sold through outlets conforming to agreed standards of stockholding and fitting services. Because the drawing up of an approved standard will take time, the report recommends that, for the present, young children's footwear conforming to the present purchase tax exemption should be zero-rated for VAT. Everyone on both sides of the House will be pleased to know that I accept that recommendation. As far as the longer term is concerned, I am considering the practicalities of the proposals with my right hon. Friend the Secretary of State for Social Services.

Young Children's Clothing

As far as VAT and young children's clothing is concerned, we went over this ground at great length during last year's debates, and I can sum up my decision by saying on Shrove Tuesday, the traditional day of repentance: "I was wrong". It will be zero-rated.

But it is essential that the criteria should be altered. And for this reason. One of the aspects of this matter which has throughout troubled successive Chancellors has been the very considerable

abuse of the relief for young children's clothing. It has been estimated that as much as 25 per cent. of so-called young children's clothing which is exempt from purchase tax is in fact worn by adults. This is, of course, to make a complete nonsense of the relief, and unfortunately it is no part of my responsibility as Chancellor of the Exchequer to add to the many advantages already enjoyed by slim and nubile young women.

I therefore asked Customs and Excise to see whether they could not work out a more restrictive scheme, in order to cut the abuse to the minimum. This they have done, though they will, I suspect, have needed all their ingenuity to deal with a situation where, for instance—so the Customs experts tell me—the waist measurement of the current Miss World is that of an average young girl of 12.

The cost of zero-rating young children's clothing and footwear will be £35 million in 1973–74, and £55 million in a full year.

Purchase Tax Food

There is one other tax which falls heavily on families with children. It is a tax which started at a rate of 15 per cent., and was three times increased, in July 1966, in March 1968, and again in November 1968, first to 16½ per cent., next to 20 per cent. and then to 22 per cent. I refer to foods, other than pet foods, which are at present charged to purchase tax—mainly all kinds of confectionery, and ice cream, crisps, soft drinks and so on.

The day has passed when these items can seriously be regarded as luxuries in the old sense of the word. They are bought by all sections of the community, and expenditure on these foods is now running at over £1,000 million a year. I have decided that they should be entirely relieved of tax—in other words, zero-rated for VAT. An order is being laid today. The cost will be £75 million in 1973–74, and £110 million in a full year.

The two taxes which have borne directly or indirectly on food have been purchase tax and SET. In March 1971 I announced that SET was to be cut by half, and in July 1971 purchase tax on food was cut from 22 per cent. to 18 per cent. As from the 1st April both purchase tax and SET will be abolished and, as a result of the decision I have just announced, all food sold in the shops


for human consumption will be relieved from VAT.

By way of contrast, at the rates in force when we took office, the yield of purchase tax and SET on food would next year have been £225 million. I am sure that this change will be welcomed in all parts of the House.

General

To put the change in the system of indirect taxation into perspective, the phased changeover from purchase tax and SET to VAT will mean that, compared with the rates of purchase tax and SET in existence when the changeover was announced, the yield of VAT on a full year basis will be about £900 million less than it would otherwise have been.

Whatever may be the views of individual right hon. and hon. Members about the change in the system of indirect taxation, I am sure that the whole House will join me in paying tribute to Her Majesty's Customs and Excise and to my hon. Friend the Financial Secretary, who has borne the brunt of the detailed work.

SOCIAL SECURITY BENEFITS

I come now to pensions and social security benefits. First I should remind the House that the prescribed amounts for Family Income Supplement will be increased next month by sums varying from £1 to £2.50 depending on the size of the family.

The House will recall that until last year, it had been the practice for pensions and related benefits to be reviewed only once every two years. No one has doubted that we were right to change that, and to provide for a review every year.

My right hon. Friend the Secretary of State for Social Services will tomorrow be making a full statement of the Government's proposals but, so that those proposals can be seen in the context of the Budget, I will—as in the previous two Budget Statements—give the House the background to our decisions and the substance of those decisions.

One of the main points of agreement in the tripartite talks last autumn was that the more the Government and the

nation act together to counter inflation, the more the low paid, the pensioners and others least able to protect themselves will benefit. It is a fact of life, which is all too obvious to the pensioners, that whatever the Government—any Government—decide to do to improve the position of the pensioner, the result depends on the rest of the community not trying to grab more than their share, and also on being willing to pay the cost.

My right hon. Friend the Prime Minister in introducing the Government's counter-inflation policy, pledged that the pensioners would share in the growth of national prosperity. The first fruit of that pledge was the special once-and-for-all payment three months ago of £20 for a married pensioner couple and £10 for a single pensioner. I hope that everyone in the country will note that it is because we are determined that the counter-inflation policy shall succeed that we are able to make a further real improvement in pensions.

We believe that it is right this year to give priority to pensions and supplementary pensions, the increase of which will therefore be greater than in the case of other benefits.

Short-term benefits—that is, primarily sickness and unemployment benefit—and the basic rates of supplementary benefit will be increased by £1 a week for a married couple and 60p a week for a single person.

Last year the increase in the pension for a married couple was £1.20 and for a single person 75p. This year the pension will be increased by £1.60 for a married couple to £12.50 and by £1 for a single pensioner to £7.75. In addition, of course pensioners and others receiving social security benefits will stand to gain substantially from the Government's other measures such as rent rebates and allowances. The total cost of all the improvements in national insurance benefits is estimated at about £500 million in a full year. This, of course, leads me to the consequent increase in contributions.

The largest share of the increase in contributions will again be met by the employers' contributions, and the increases in employees' contributions will be wholly earnings related. As previously, there will be flat-rate increases


for the self-employed and non-employed. The Exchequer will continue to contribute about 18 per cent. of the total revenue from contributions. These are the details.

The employers' flat-rate contribution for men will go up by 14p. The earnings ceiling for graduated contributions will be raised from £48 to £54 a week, and the rate of graduated contributions will go up by 0·25 per cent. on earnings between £9 and £54 a week.

Next, the employees' flat-rate contributions. Last year they were not altered at all. My right hon. Friend and I think that it would be wrong to leave them unaltered this year. In order to protect the lower paid, the employed man's flat-rate contribution will therefore be reduced by 4p a week. This will mean that for all men with earnings below £24 a week, their total payments will be slightly less than at present. I am sure that, in the context of the counter-inflation policy, the House will agree that this is right.

It was announced in December 1971 that, with annual reviews, increases in pensions and related benefits would be paid in November. Because of the early Budget, my right hon. Friend has arranged for the date to be advanced to 1st October.

With this latest increase, the pension will have been increased by the present Government in a period of just over three years by 55 per cent. in cash terms, or more than during the whole of the previous 12 years. Or to put the matter in real terms, over the same period the pension will have been increased by almost twice as much as the increase in prices. That is what my right hon. Friend, the Prime Minister, meant by promising that the pensioners would share in the growth of national prosperity.

CONCLUSION

But the old and the retired can be given a proper share of our rising national output only if others do not take more than their fair share.

And in the interests of the pensioners, no less than of the nation as a whole, it is right that I should make one further point so that there is no risk of misunderstanding. In the past the situation during wage negotiations was one where it was always possible to argue that a week or two on strike, or some other form of industrial action, would result in a compromise and an improved offer.

Today the situation is quite different because the Government have for the time being laid down, in the interests of the nation as a whole, clear and definite limits on pay increases. In these circumstances it is inconceivable that any Government could agree to a dispute being settled by an offer outside the limits laid down. And it follows that industrial action which sets out to achieve that will merely make the nation poorer, and no one richer. As a people we can now show, for a welcome change, that militancy does not pay, and that responsibility, moderation and common sense will prevail.

The central objective of this Budget is to maintain the economic expansion which we have sought for so long, and which we are now at last achieving. And to succeed we must all—Government and nation alike—be steadfast in our resolve to control inflation. Only in this way can we give the British people the opportunity to create a new wealth and a new strength for our country. And we mean to do just that.

ROYAL ASSENT

Mr. Deputy Speaker (Sir Robert Grant-Ferris): I have to notify the House, in accordance with the Royal Assent Act, 1967, that the Queen has signified Her Royal Assent to the following Acts:

1. Atomic Energy Authority (Weapons Group) Act, 1973.
2. Housing (Amendment) Act, 1973.
3. Glamorgan County Council Act, 1973.

BUDGET RESOLUTIONS AND ECONOMIC SITUATION

AMENDMENT OF THE LAW

Motion made, and Question proposed,
That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance; but this Resolution does not extend to the making of amendments with respect to value added tax so as to provide—

(a) for zero-rating or exempting any supply;
(b) for refunding any amount of tax;
(c) for varying the rate of that tax otherwise than in relation to all supplies and importations; or
(d) for any relief other than relief applicable to goods of whatever description or services of whatever description.—[Mr. Barber.]

5.32 p.m.

Mr. Harold Wilson: The House will once again agree with me in the tribute that it is usual to pay to the Chancellor of the Exchequer on his presentation of the Budget. Over the past three years we have become accustomed to this regular pattern and the right hon. Gentleman's style of presentation. On Budget Day the right hon. Gentleman invariably presents his speech agreeably, fluently, clearly and—as far as the subject matter allows, as it did once or twice again today—entertainingly, what with his utility shoes and his nubility ratios of young ladies, however measured, and I have no hesitation in congratulating him on behalf of the House yet again.
It has not passed the notice of the House that what should have been and should always be a restful weekend of mental and physical preparation has for the right hon. Gentleman this year been a time of very heavy strain, not only physical but set by the gravity of the decisions and the policies that he has been forced with his colleagues to examine at home and in Brussels. It was a pity that this should happen on the very eve of the Budget presentation.
Just as the right hon. Gentleman's style of speech is part of a regular pattern, so we have seen other regularities. For example, as well as my own regular congratulations to the right hon. Gentleman there are usually the full-throated cheers of his right hon. and hon. Friends when

he sits down. I thought that they were a little muted today compared with last year—[Interruption.] If Government supporters want to make up for it now I do not mind. But another part of the pattern each year when this has happened has been my warning to those right hon. and hon. Members who have cheered him that the Budget which they cheer in April will not look the same in the late spring or early summer, by which time the Chancellor's Budget has become as though it had never been and we have the usual mini-Budget or new Budget about the middle of the year not quite so tastefully presented but usually heralding a major lurch or change of direction in Government policy.
The same will again prove to be true this year. That would have been the case even without this week's monetary crisis. The proposals in the right hon. Gentleman's speech were quite clearly drawn up before the crisis occurred. Whatever the decisions in Brussels, the right hon. Gentleman will have to reconsider the whole of his policy in the light of those decisions, whatever they are. If the outcome of the Brussels decisions is that no attempt is made to fix the parity, he will have the support of the Opposition. He knows that to fix it too high would make us vulnerable to a future orgy of speculation because the speculation would be spurred on rather than sated by the success of speculations against the dollar. On the other hand an attempt to insure against that by fixing a very low parity is simply a prescription for forcing up food and raw material prices, reinforcing inflation and increasing the already excessive payments that we have to make to Europe. So the Chancellor has the Opposition's support in all that we believe he is trying to do in his discussions in Brussels and elsewhere in Europe.
Even without the monetary crisis, the Budget—and we admire the right hon. Gentleman's ingenuity—is posited on a cruel dilemma created by the exuberance of the right hon. Gentleman's earlier actions and the expectations raised by the Prime Minister in the General Election and in his subsequent actions. The right hon. Gentleman has asserted again that the economic growth rate is on target, and, with the usual allowance for the deficiencies in the various figures, there is


strong evidence to support its continuing at the rate which he has been describing. The right hon. Gentleman knows that the reality underlying that growth rate is associated with—not only concomitant with but causally associated with—a prodigal dissipation of the balance of payments surplus of £650 million that we bequeathed to him in 1970 with a built-in momentum carrying it to over £1,000 Million in 1971—[An HON. MEMBER: "What about the debts?"] We did not get from the right hon. Gentleman today the extent to which during our period in office we built up a surplus in non-Government debts and, since this Government came to office, the extraordinary amount of borrowing by British industry and British finance which has been part of this whole transaction.
The £1,000 million which the right hon. Gentleman enjoyed in 1971 has gone. The estimates for this year by various competent authorities vary from a £500 million to a £1,000 million overall deficit. The trade balance has worsened by £1,000 million in a year—that is, over the last year. It is still deteriorating. The National Institute, in its on the whole friendly and optimistic review of the right hon. Gentleman's prospects, forecasts the visible trade balance for 1973 at £1,625 million. The Department of Applied Economics, Cambridge, warns of a £1,000 million balance of payments deficit unless the growth rate is cut. It seemed to me that what the Chancellor said about the prospects for trade was unusually complacent in the light of what has been happening recently.
The problem of the parity, whether under a free float or under some new fixed régime, is not the right hon. Gentleman's only dilemma. He and his colleagues have boasted—he did it again today—of the tax cuts of the past 2½ years. They are not due to the right hon. Gentleman's providence. They are not due to cuts in Government expenditure, which the Prime Minister told us in the last election would alone be the means of getting tax cuts. Government expenditure has increased more rapidly under this Government than under any previous Government. The tax cuts that have been made have been financed as a result of Government borrowing—in fact, by deficit financing at this time.
In the last fiscal year of the Labour Government the net borrowing requirement was negative. It was a debt repayment of £1,117 million. Taking the financial years for which this Government have been responsible, in 1971–72 there was net borrowing of £515 million. I do not know whether that has been varied with the figures that the Chancellor has examined today. I thought I heard the right hon. Gentleman say—he will correct me if I am wrong—that there will be about £2,800 million net borrowing, and next year, with all the qualifications that he made, he spoke of an even higher figure than I have seen estimated. The CBI speaks of a figure of £4,000 million, but the Chancellor spoke of £4,423 million before making certain qualifications on how it has been reached.
So expenditure has not fallen. Under this Government expenditure has risen more rapidly than at any time in our history. I sometimes read the suggestion that it is rising more rapidly than at any time in peace time. In fact, it is not only in peace time: but, on figures I saw today—I should like to check them further—it looks as though the Government's borrowing requirement now is greater even than in the years of the war.

Sir Harmar Nicholls: The right hon. Gentleman ought to check them.

Mr. Wilson: I did as far as I could, but I was waiting to hear the Chancellor's figure.
We have the unanimous report of the Select Committee on Public Expenditure. The December forward projection, compared with that of November 1971, showed an increase in expenditure over the coming year of £1,200 million. Some have estimated £1,500 million as the increase of expenditure over a single year compared with what was forecast for this year. According to the Select Committee, only £200 million was counter-cyclical in the form of measures to deal with developing unemployment on the Select Committee's two-year criteria.
Though the October 1970 expenditure programme, which we had soon after this Government came into office, cut Labour's forward projection by £942 million, all that survives of those cuts is the miserable saving from the denial of school milk. From November 1972 expenditure has


increased by £482 million compared with £1,213 million over the past year. The Select Committee reports that the increase over the Labour Government's spending proposals for this year has now increased net by £750 million. On top of this we have the increase in the money supply.
I asked the Prime Minister recently about interest rates. We have heard little about these today, except the big figures for national savings. Interest rates are rapidly becoming about the most cost-inflationary element in the business, to say nothing of the inevitable effect—I was surprised that the Chancellor did not deal with this today—on building society mortgages for young would-be owner-occupiers on whom the Prime Minister, as we all recall, lavished so many insincere Central Office glycerine tears during the election. What will be the effect of the new National Savings incentives—I agree that they reflect only the conditions in the market—on the volume of funds available to building societies and through building societies, at whatever rate they may have to be, for young would-be owner-occupiers?
I was surprised that the Chancellor did not deal with the effects of the so-called free market in the City. If it could ever have worked, if one felt that this particular notion of a free market in the City could have worked, it certainly cannot work against the background of a £4,000 million borrowing requirement. Many hon. Gentlemen opposite, as well as many people in the City and in industry, know that. It cannot function against the background of a totally demoralised gilt-edged market in a situation where on one day of the week the joint stock banks' base rates go up and, a few days later, bank clients' inter-bank dealings leapfrog over them until the base rates again join the leapfrog game.
The whole process is aggravated, as is the foreign balance, by the volatile Eurocurrency markets. I was surprised that the Chancellor did not deal with that to any extent today in his two-hours otherwise informative speech. How much he might have told us of his estimates—I hear different estimates—of the total volume of the Euro-currency market, but none of the authoritative estimates seems less than 100 billion or indeed 120 billion dollars or beyond. We had reason

last year to feel the effect on our balance of payments, but equally it is making utter nonsense of monetary management and therefore forcing up interest rates in the City.
I now come to the Chancellor's more important announcements. We heartily welcome his conversion on the subject of children's clothing. He has been a very slow learner, but we are happy that he got there in the end. I have no doubt that certain newspapers will claim the credit by their belated campaign. I am sure they will. They did not report us when we raised this matter last year. They did not report our vote and they did not report the vote of the right hon. Gentleman and all the specious arguments that he then employed about children's clothes, which we are glad to see he has forsworn today.
In one of his earliest points, the Chancellor referred to the payment of tax credits to mothers. So far as we understood his formal words, we welcome this. As some of us said in the debate on the Address, this should never have been in question. I am glad that the right hon. Gentleman put the position right today.
On oil in the North Seas—I presume that what the Chancellor was saying referred to the Celtic Seas as well—we welcome the decision about their liability to corporation tax and non-relief losses in the Middle East or elsewhere. We also welcome the provision to see that these measures are effectively backdated to prevent any of the bonanzas that they were hoping to get away with before he acted. As many of us have argued, it means having the equivalent of posted prices, which was inevitable in what the right hon. Gentleman said this afternoon.
However, we must ask him—we shall want to examine this—whether it goes far enough. Although it is not comparable with the Norwegian settlement in respect of the Egofisk field, or, unless the Chancellor or another Minister corrects this later, with the kind of domestic revenue enjoyed by Governments in the Middle East and, I believe, in substantial parts of Canada and the United States, it is a step in the right direction. It is a big change from the time when the Government, instead of auctioning off these things, were handing them over at a few hundred pounds each—each of which was capable of making hundreds


of thousands or millions of pounds of revenue.
I welcome what the Chancellor said on the dependent relative allowance and age exemption.
On building land, after all this thought, it is a bitter disappointment that the Chancellor has not more to propose to us. He must realise the relevance of this matter to the whole appeal that the Government are making for a prices and incomes policy. In a year when people have been tightly held down on incomes and are being hard hit by rising prices, it is offensive, indecent, obscene and a total breach in the Government's proclaimed policy that people can make fortunes literally in an afternoon and go on television and boast that they have made a quarter of a million pounds on a property deal in this way.
Although it looks as though the right hon. Gentleman is going to act, up to a point, I must warn him that he has left it far too late. The damage has been done. Vast amounts of public and private householders' money—it will probably run into several hundred million pounds—have poured over the dam while he dithered about and refused to act. Certainly he has not done anything now to ensure what I think would be the wish of everyone on this side of the House, and I hope some hon. Gentlemen opposite, that values created by the community should accrue to the community that created them.
I did not hear the right hon. Gentleman say very much about the empty offices. There was his proposal for a building withholding tax, or something to that effect—we can check his phrase later—but it seems to me that this is not the way to deal with the scandal of unused sites and of unused buildings, some of which have been standing empty for years. What the Chancellor should do, if he is not going to act himself, is give the local authorities full powers to rate those buildings, not merely on a permissive but on a mandatory basis. They should be mandatorily rated, and I see no reason why the rate percentage should be limited to 100 per cent. Again, it is offensive in this situation that these properties are not used, and the rates could well go up to 150 per cent. or 200 per cent. per annum.
On VAT, we consider that the Chancellor's 10 per cent. decision is deplorable and inflationary, however he tried to erode it by certain exemptions. I have referred to children's clothing. Some of his decisions on charities are very much welcome, although some of my right hon. and hon. Friends and the charities themselves will want to study how far they go. There are still some very important charities, I think, which have not benefited in a way which would have been right and reasonable. We welcome his decision, of course, on sweets and confectionery, but it is a bit of a mockery if that is his answer to the problem of rising food prices.
What was significant about this speech —agreeable though it was—was the long list of things with which the right hon. Gentleman failed to deal. He failed, over a large field, to deal with rates. What he said may help in some cases, but it will be very unjust, very arbitrary in how it affects different local authorities, very unequal in incidence, by relating it purely to revaluation.
The right hon. Gentleman did not provide, particularly, for some of our big cities, our older cities, our big urban areas, where the problem is not so much revaluation—in some cases not at all revaluation—as one of inflation in the fulfilment and operation of essential community services. With the cost of these services going up inevitably, with the services being required—I have not heard the Government say that the services should be cut—I am very disappointed, and I think that the local authorities and the ratepayers will be disappointed, at what seems to me a very limited, tinkering approach to this problem.
I was surprised that when he talked about the regions—I do not think that I missed what he said on this—the right hon. Gentleman did not tell us what his policy will be for REP. Surely that is one of the most essential things. He told us a bit about the regions but he should have made the announcement about REP this afternoon. It has been long delayed and the right hon. Gentleman is being pressed for a decision by many people who at one time were against it, including, I think, the CBI.
Also, I had hoped, when he talked about the regions and the community, that the right hon. Gentleman would


state firmly and clearly that the Government will not allow any of our development or intermediate areas to be scheduled as part of the central areas of the Community, as is being currently proposed by M. Borschette, the Commissioner for Competition.
Those are some of the things with which the Chancellor did not deal. Even when he referred to the threshold, he did not deal with the problem of fiscal drag over the past year. How many of those of whom he spoke, who last year were eased because of the effect of inflation and were therefore eased in taxation by his pound a week proposals, are now paying more tax as a result of inflation?
But, above all, the Chancellor has not dealt with food prices in the slightest, although that is the main item entering into most family budgets. He has not dealt with housing, he has not dealt with, or announced a suspension of, the increase in council house rents due to come in next month. He has not announced any suspension or stop in the process of decontrol in privately-rented houses.
On the other side—this is what makes the whole economic policy, taking into account the prices and incomes policy, such a totally unfair package—he has not said that he is going to halt the —300 million and more relief voted in the last Budget for the wealthiest taxpayers, many of whom will be automatically taking home, after deductions, a figure much bigger that the total amount that the richest person in the country can hope to get under the prices and incomes policy. They are limited to 5 per cent. The wealthiest taxpayers, including some who are dependent on unearned income, will have a lot more take-home or sent-home than that. This is a condemnation of a fundamentally unfair economic and social policy. It is because it is unfair that, increasingly, the Government will find that it is unworkable.
So, however agreeable his presentation, the Chancellor cannot get away from the economic background to the Budget—the biggest increase in the cost of living in our peacetime history, indeed, going up at a more rapid rate than even in the years of the last war; the fact of 18 months of unemployment of over 750,000—the figure that the Prime Minister repeatedly forecast in the last Parlia-

ment would happen under the Labour Government, although we never came within a long distance of it; a record trade deficit against a record inherited surplus two years ago; the virtual certainty of a record balance of payments deficit; record interest rates; record house prices; record land prices; the lowest house building figures since the Tories were last in office; the lowest public authority house building for over ten years; two devaluations in eight months, three in fourteen, now amounting—[HON. MEMBERS: "Rubbish."] Oh, yes. [HON. MEMBERS: "Hear, hear."] These devaluations are being paid for by the pensioners. They are being paid for by everyone who is paying high prices in consequence. We had to devalue, after inheriting an —800 million deficit. The Tories have three times devalued after a —1,000 million surplus.
Theirs has been a miserable record in industrial investment. Why did not the Chancellor mention the record of industrial investment announced this morning —manufacturing investment down by 18 per cent. last year when compared with the previous year? Was that the kind of glowing economy that he was trying to draw to our attention today? Is that why he said that industry is better prepared now to take advantage of rising world markets?
Finally, industrial relations. More man-days were lost through disputes last year than in nearly six years of a Labour Government—[An HON. MEMBER: "Whose fault was that?"] The fault of this Government and that Prime Minister—the man who was going to solve all the strike problems, who embittered them with the Industrial Relations Act and with his confrontations and with his arrest of the dockers and so on. No, Sir—that is the reality underlying this Budget. That is the reality that we shall see more clearly as these months go by.
Therefore, I end my compliments to the right hon. Gentleman as I began them —with a tribute to his agreeable presentation, though very unevenly to his content. It was, of course, anything but a maiden speech. The Chancellor lost his fiscal virginity a long time ago. Nevertheless, in terms familiar in this House, we shall expect to hear from him again in the very near future.

Several Hon. Members: rose—

Mr. Gerald Kaufman: On a point of order. The Chancellor, in his Budget statement, said that the Secretary of State for the Environment would be making a statement on rents. Could the Leader of the House say whether this statement will be made to this House or outside the House?

Mr. Deputy Speaker (Miss Harvie Anderson): That is not a point of order.

5.58 p.m.

Mr. Percy Grieve: I was very sorry that the obligations of political faction constrained the right hon. Gentleman the Leader of the Opposition to refuse to my right hon. Friend's Budget the credit and welcome it deserves. I do not believe for one moment that the right hon. Gentleman's reaction will be that of the country as a whole. In my right hon. Friend's Budget there appear to be concessions and advantages for the whole spectrum of our community.
I begin with a welcome to the increase which is provided for pensioners. As my right hon. Friend the Chancellor said, in the comparatively short time during which the present Government have been in office they have done more for the pensioner than has been done for years previously, and certainly during the whole period of office of the Government over which the present Leader of the Opposition presided.
The right hon. Gentleman made it a feature of his criticism that my right hon. Friend had not given way to pressures which have been brought upon him in a great many quarters to go back upon the tax concessions and tax reforms which he promised and has formulated in the last two Budgets. I am extremely happy that my right hon. Friend has had the courage of his convictions, which I profoundly believe are to the advantage and interest of our country.
The Leader of the Opposition referred to a fall off in industrial investment. But what greater cause has there been over the years for a decline in industrial investment than the penal taxation for which Chancellors of the right hon. Gentleman's Government were responsible year after year? The concessions which have been made, and have been so much criticised by the right hon. Gentleman, to the holders of investment income were no more than a small recompense for the

years in which they suffered completely penal taxation.
I represent a constituency in which a large number of retired people are living on investment incomes, the fruits of a lifetime of saving and of the sale of the businesses which they have built up. My constituents in that class year after year, found that their incomes were eroded by the Labour Government's penal taxation. I get letter after letter from constituents rightly telling me that their standard of living when they retire falls away completely.
The concession which my right hon. Friend has made with regard to the first —2,000 of investment income is a modest concession which will bring a great relief to many who have served the country well throughout their lives, who have not relied on pensions for their retirement but on savings, and who find that as a result of the highest rates of direct taxation in the western world they are very hard put to it to maintain a reasonable standard of living in their retirement.
Regarding the provisions relating to taxation, I particularly welcome the concessions on death duties. As my right hon. Friend said, it has been grotesquely unfair that, certainly as far back as I can remember, estate duty has been payable on the values prevailing at the date of death. The position has frequently been reached, where a slump has followed the death of someone who has left a provision for his family, that the assets of the estate have sometimes not been sufficient to pay the duty. The reform proposed by my right hon. Friend, which we shall see incorporated in the Finance Bill, is that new rules are to be laid down for valuing assets at the date of sale. That is a welcome concession to a very large number of people, some of whom are of quite modest means, and to their dependants when they die.
I am sometimes horrified by the fact that when a breadwinner dies his widow and family not only lose their staple support but, by reason of death duties, find that their whole standard of living is completely cut away. The concessions which my right hon. Friend made in previous Finance Bills with regard to the first —15,000 of capital left, and then the —15,000 left to a spouse, have gone a long way to remedy this difficulty. The


concessions on valuation now made are an extremely important mitigation of the burden of estate duty.
I hope that my right hon. Friend the Chancellor and my hon. Friend the Financial Secretary will not refrain from further investigation of the whole problem and weight of estate duty. I have always thought that if we had much more moderate duties on death than those we have at present, people might well not feel compelled to take the measures of avoidance which they now take, often at very considerable sacrifice to themselves, by making over money to their children during their lifetime. The yield from estate duty, were it more moderate, might be greatly increased.
So far, so good. I congratulate my right hon. Friend upon the concessions made so far. There is another matter which I should have been happy to see dealt with in the Budget, and my hon. Friend the Financial Secretary knows what that is as I have written numerous letters to the Treasury about it. That is the problem of the taxation of the income of married women.
One of the first things done by the present Government, a laudable thing, was to give the option of separation of the incomes of husbands and wives when that income was earned income. I could do nothing but applaud that. But by concentrating on earned income the Government have committed yet a further act of discrimination against investment income. It is surely grossly unfair that a married woman with an estate of her own should find herself poorer on marriage and paying more tax on her income, through her husband, than she would have paid had she remained single.
At a time when Women's Lib is rightly a cause in respect of which many hon. Members have nailed their flag to the mast, it is surely a matter for comment that in many cases it would pay people, in respect of their taxation position, to live in sin rather than to get married. If we are to avoid discrimination against women it is vital—sooner or later we must come to it—that married women should be given the option of paying tax separately as single individuals upon their incomes and that these incomes should

not be aggregated with those of their husbands. I have taken up this matter with Treasury Ministers on numerous occasions over the years and I make no apology for raising it again today. It does not in any way detract from my congratulations to my right hon. Friend upon his Budget, which continues the right policy for the economy of this country, a policy of concentrating on growth while trying to beat inflation.
Every passage of the long, careful summary of my right hon. Friend as he introduced his Budget was redolent of the importance for the future of our country and its present prosperity of combining those two objectives and carrying them through to a successful conclusion.
I should like to welcome some other provisions in the Budget. I do not believe that any hon. Member would not congratulate my right hon. Friend on his decision with regard to children's shoes and children's clothing, a matter which has greatly disturbed the public and on which I have received numerous letters from constituents. No one will withhold congratulations to my right hon. Friend for the concessions he has (made with regard to value added tax and charities. To be particularly welcomed are those provisions dealing with goods which are sold in charity shops. I have on my desk at present a lengthy petition from supporters of Oxfam in my constituency. They will go to bed happier tonight in the knowledge that the work which they put into this noble cause is to have the support of the Chancellor through the tax concessions which have been made.
I end this short appreciation of the Budget, made, as such an appreciation must be, on the spur of the moment, just after the Chancelor has outlined his Budget to the House. I end where I began. This Budget as I see it contains something for every member of the community. The Leader of the Opposition, who indicated to me as he left the Chamber his regret at having to leave, said this was not a fair Budget. I believe that when it goes out to the country it will be seen to be extremely fair, carefully balanced to preserving growth and giving all the concessions that can be given to every person throughout the community. I congratulate my right hon. Friend.

6.11 p.m.

Mr. Roy Hughes: The hon. and learned Member for Solihull (Mr. Grieve) said that in his opinion this was essentially a fair Budget. I thought that the distribution was inequitable, but I agree with the concessions that have been made to the pensioners and I welcome the increase of —1·60 for married couples and —1 for single persons. I also welcome the improvements in the supplementary allowances, and the concessions on food are to be welcomed.
But not so welcome are the concessions on confectionery, ice cream, crips, chocolates, sweets and so on. I speak as a father of three young children and I feel that these concessions are too generous. Certainly, they will provoke a lot of dental troubles and my children already have too many of these commodities.
There are to be concessions to charities in respect of value added tax. I have written on numerous occasions to the Chancellor about the problem and I am glad that he is taking action and is granting the necessary concessions. My right hon. Friends have been engaging in considerable agitation for a long period on the vexed question of children's clothing, so again we welcome that the Chancellor has taken note of our representations.
The principal subject I want to deal with concerns rates. Certainly the Chancellor has recognised the problem by granting the concession—a sort of subsidy—for half the cost of increases above 10 per cent, for ratepayers for the period 1973–74. He has estimated the cost at some —10 million. The concession to confectionery will cost about —110 million and I would have preferred to see the figures the other way round.
The Chancellor admits that there is a problem but as I see it, and as the Leader of the Opposition has pointed out, he is tackling it only by dealing with revaluation whereas, of course, inflation has been an equally large problem in local government. Many local authorities are in a desperate position and I can only quote the position of my local authority. After all, charity begins at home. The Town Clerk of Newport wrote to the Prime Minister a few weeks ago pointing out that according to his authority's estimates it would need an increase in the rates of

36 per cent. After certain discussions had taken place with the Department of the Environment the figure was reduced to 31 per cent. but this will still be a colossal increase. In my constituency some domestic ratepayers would be faced with increases of no less than 90 per cent. in their rate demands, and this is a serious situation.
The Government, of course, for some time have been keen to take action against wages and this is what the Counter-Inflation Bill is all about. They have done little directly to control food prices in line with what the TUC has requested. They regard this as something approaching an impossible task apparently, yet two countries in Western Europe—Sweden and Austria—are adopting these practices.
House prices last year rose by 47 per cent., and rents have been increasing at a similar rate. Much of this is due to the pernicious Housing Finance Act. One would have thought that the Government, who are allegedly going all out to combat inflation, would have been more generous in their assistance to the ratepayers in the difficult situation they now face.
Certainly, revaluation has twisted the balance from industrial and commercial properties to the domestic ratepayer. A fortnight ago an old-age pensioner from my constituency told me that the valuation of his flat had increased from —66 to —176, about a 250 per cent. increase. That is an indication of the berserk way in which valuations are acting upon owner-occupiers and tenants.
Of course, their position has been influenced by soaring inflation in property values, quite apart from increased rents. It is reckoned, certainly in Newport, that tenants in post-war council houses would face an increase of over 15 per cent. and that approximately 2,000 of them would have increases of 50 per cent. or more. There is evidence of disproportionate increases in rateable values of council houses. I can only repeat that local authorities are facing the combined effects of inflation and revaluation but the Chancellor this afternoon seemed only to have recognised the problem of revaluation.
Perhaps the most serious problem is that of inflation. The estimated expenditure in Newport for 1973–74 reflects the


increased cost of the existing services, quite apart from the growth of services, much of which is being encouraged by the Government. Certainly, the increase in the rate support grant has been insufficient to meet these increased financial costs. The Government originally requested that rates should be increased by only about 5 per cent. Again I can only illustrate what would happen in my own town. Such an increase would mean a severe cutback in services, but it could also mean redundancies. Already in recent months we have experienced a redundancy figure of over 2,000, and this therefore poses a serious problem.
The Government already have power under the Local Government Act 1966 to increase the rate support grant at any time if they find that an unforeseen increase has taken place in the level of prices, costs and remuneration. The implementation of this section of the Act is surely justified in present circumstances.
The Association of Municipal Corporations has called for differential domestic relief in defined individual circumstances, as it puts it—in other words, to restrict the total amount of increases to be paid by individual householders. The Chancellor has taken note of this point of view, I agree, by granting half of the 10 per cent. increase. But still more assistance is due to our local authorities. Again, I can give only the figures of my own town. If the increase were limited to 15 per cent. in Newport the cost to the Government would be —173,000. If the increase were limited to 10 per cent. the cost to the Government would be —230,000. The Chancellor should have second thoughts about this matter and grant these concessions to our local authorities which are at present having such a difficult time.

6.21 p.m.

Mr. Wilfred Proudfoot: This Budget has had the most peculiar run-up of any Budget ever. Floating the pound has left us almost insulated from the currency crisis. I am sure the remarks of the Leader of the Opposition have convinced the House this afternoon that, if he was not before, he is now a floater.
The newspapers have not known what to say, except that the Budget would be a neutral one and would slap on even

more taxation. In my opinion virtually all the newspapers have it wrong.
Listening to the Leader of the Opposition was like taking a stroll down memory lane. He has not found out that this country is in a new era. There is an entirely new ball game. The Government and the party to which I belong have entirely changed the parameters within which business and people work. Entry into Europe has also had something to do with this. The whole situation has changed.
What has delighted me today, as I am sure it will delight those outside the House, is that the Chancellor has, correctly, identified the total determination of the Government to go for growth. I urge my right hon. Friends and hon. Friends in the Government not to read too many of the sayings of the economists and economic journalists. They have to keep writing their articles and in so doing they flit from one theory to another. Recently they were saying we have been growing too fast and that we could not sustain this rate of growth. I for one do not believe that. To a certain degree economic growth is almost a habit. Once we have achieved that habit we can keep on growing.
It is foolish to pretend that everyone in this country likes growth. The environmental lobby says—and, incredibly enough, it has been saying it recently—that economic growth can destroy the environment. I believe that argument cannot be sustained and should be ignored.
When discussing economic growth we must recognise that it means change and, with a 5 per cent. growth rate, massive change. It means the centres of towns being torn out and the construction of motorways to give access to the residents of the towns involved and surrounding towns so that the whole place may become more efficient. It means that slum clearance can go ahead at a faster rate. It means that everything we look at is in process of change.
If our people do not want economic growth, the corollary is that they do not want change and they want to be left alone in the ways they know. It is impossible to opt out of the world in the way advocated by those who are fighting this change. This change is inevitably coming; the Government recognise it, and


they are working on the side of change. I am convinced it is right to do so.
In the last few weeks the words "fine tuning of the economy" have started to creep into the sayings of the economic journalists. I do not believe the economy can be fine-tuned. It is a lumbering great beast. It is 55 million people's effort, or lack of effort. It is all the companies, the nationalised industries and the sum total of the efforts of the country. It is the sum total of what people do—whether they stay in or whether they go out and spend frivolously, or on consumer durables. This is what has happened. I for one do not believe that we can fine tune to the degree we have kidded ourselves we could in the past.
Over the last two years when unemployment was rising, the Opposition shouted and howled at the Government about percentage increases, and so on. Then, when we started to turn the economy round—and it takes time to react—everybody agreed to changing the economy this way and to the expenditure of more Government money to trigger off growth.
The Government did exactly that. Yet those fickle chaps who write the economic articles were saying only last week, "Whoa! We should be careful; it might have been right then, but now it is wrong to have spent that money to get rid of unemployment." These chaps who write in the newspapers have one responsibility —to sell newspapers and to entertain us when we read them. Indeed, newspapers have an entertainment value and they should be read from that point of view more often than from any other. Being a Government is a sensible business-like operation. I am sure the Government have matters right on this score.
Let us consider for a moment how to run a country or an economy. Just as in any other business, there is a handful of figures. The chaps at the top look at that handful of figures and if one of the figures goes wrong, underneath each figure is another pyramid of figures to be looked at. We therefore look at the figures in our economy. One figure at which hon. Members on both sides of the House look is that of unemployment. If we look at the pyramid of figures below that figure, nobody, but nobody, believes them. The Opposition do not believe them, the Government do not believe

them and the businessmen in the country do not believe them.

Mr. Harry Ewing: The unemployed believe them.

Mr. Proudfoot: I live, and was born, in an area with 30 per cent. unemployment. When it comes to the emotional psychological impact of unemployment I have as much personal experience of this as any Opposition Member. But I do not think that that was the case. Indeed, on the local television channel I even got away with saying that the unemployment we experienced a year or 18 months ago was probably the healthiest we had ever had although that might have seemed a peculiar expression to use. I believe it was shake-out and that industry was being mobilised. I am convinced that is right.
If the hon. Member for Stirling and Falkirk Burghs (Mr. Ewing) examines carefully what has happened to regional policy and what is now happening in connection with the EEC regional policy, he will see the effort is more determined than ever before.
But let me caution the hon. Member not to be to excited by this, nor to think that Wales, Scotland and the North-East can be put right overnight. If the aim was to put matters right overnight, both parties must accept they have failed. I happen to believe the North-East will be the area to come right most quickly. The infrastructure has been put in and it looks across the North Sea to the Common Market.
But let us not pretend that Governments, no matter how big, can change the economic forces easily. Both parties have tried to help the regions massively.
In the North-East, which I know best, capital allowances and grants essential to businesses have created the most incredibly modern industry entirely capital-intensive and not labour-intensive. In that respect, therefore, they have failed in their purpose. Any hon. Member who does not know the North-East should go up there and see how it has changed. He would get a tremendous shock. It would entirely change his idea as to what development regions are really like.
The noise from the Opposition about unemployment was supported by what I believe was an unconscious pressure on


the Government caused by the cross-party voting last year on entry into the European Economic Community, which I strongly supported. I believe that the Government had to back away then, as the shake-out was going on, so that Opposition Members could vote with them for entry into Europe. Otherwise, those Labour Members who favoured entry would have been under such enormous political pressures that they would have had to go into the anti-Common Market Lobby against their best wishes. [Interruption.] That is what I observed in the past two years and I am sure that that observation is as good as the observations of the journalists who write about what goes on here.
My right hon. Friend the Prime Minister said that he wanted to be a radical, reforming Prime Minister, and he has succeeded beyond my wildest dreams, to such an extent that the man in the street does not know what has happened.

Mr. Ewing: Watch it.

Mr. Proudfoot: I have no need to watch it.

Mr. Speaker: Order. I want to call as many hon. Members as possible. The hon. Member who is talking from a sedentary position is simply lengthening the speech of the hon. Member for Brighouse and Spenborough (Mr. Proudfoot).

Mr. Proudfoot: I am sorry, Mr. Speaker. I shall try not to be provoked.
An incredible amount will happen on 1st April. We are starting a new system of company taxation; we are going on to a unified tax; and we are getting rid of SET and purchase tax, with the introduction of value added tax. There is to be a 20 per cent. cut in import tax, which is the beginning of competition from the Common Market. We also start a month of local government elections to create new local authorities. I believe that all those reforms will work. They put into effect our General Election programme, and I have no doubt that carrying out that programme will take us to victory at the next General Election.
I was amazed that the Leader of the Opposition had not taken on board what my right hon. Friend the Chancellor said about land. When I was previously a

Member I heard debates raging in the Chamber and in the back-bench committees of my own party about the price of land. In the 1930s the Tory Party tried to tax land development. A Bill introducing a betterment charge went through the House, but it was never operated. The Labour Party has had two goes since the war, ending in miserable failure. All that was achieved was to put up the price of land.
Wherever we go in the country we find the problem raised by many people who are frightened about the situation. But when we look into the logic of what is happening we find that it is virtually impossible to tax increases in the price of land. My right hon. Friend the Chancellor said today that once planning permission has been given it must he operated as quickly as possible, and that there will be a tax on a percentage of the increase in price. He did not name the percentage, though it can be pretty swingeing. That will increase the availability of land and speed up the building of houses. It is the most practical step that has been taken over the price of land.

Mr. William Edwards: Does not the hon. Gentleman appreciate that the proposal has the same defect as our Land Commission provisions, because if there is a possibility of a levy on receipt of planning permission some people who have land ripe for development will not apply for planning permission? The levy in this case is uncertain; there are at least four variants in the provision that enables people to get out of paying it.

Mr. Proudfoot: I accept completely what the hon. Gentleman has said. I do not think that there is any foolproof way of taxing profits on land, except to tax up to 75 per cent. once a man has sold land.
I think that my right hon. Friend's proposal is a once-for-all adjustment for going into Europe. I learnt from the newspapers that even Spaniards came here and started to buy land. The hon. Gentleman shakes his head but he will find that in France and other European countries the savings institutions are not trusted as they are here. People do not put their money into banks, building societies, and so on. If a family saves


some money it buys land, and that forces up the price. I believe that the price of land here has risen to equal the prices on the Continent.
I also welcome my right hon. Friend's incentives for workers in certain enterprises to be shareholders in those enterprises. I hope that the new share savings scheme will succeed beyond his wildest dreams. It reminds me very much of Louis O'Kelso's two-income plan, except that the workers will not be lent the money to buy their shares: they will have to save it first. I welcome that. The Liberals will say that my right hon. Friend has stolen their clothes, but I welcome the scheme and wish it every success. I am sure that it will give people a completely new outlook on what the whole of business is about.
The tax credit system delights me. Like every hon. Member, I have had representations from all kinds of people about the family allowance going to the dads instead of the mums. I had thought that Andy Capp was dead, but many social workers believe that unisex, with people sharing everything, does not exist in some areas. I am surprised at that, but I am sure that my right hon. Friend was right to make the decision he did, in view of the political pressures.
The increased pensions will be enormously welcomed by the old people. The Labour Party must look at the facts behind the pensions. I know that young people are very worried about the old, but the fact is that although the young bride-to-be no longer has a bottom drawer, those who are about to retire do, with sufficient sheets and other linen. They do not want to part with their favourite furniture. When hon. Members, and young people in particular, consider the position of old-age pensioners they should remember that retired people are not establishing a home, and so their expenses are very different. I am delighted at what my right hon. Friend has done.
I am also delighted that value added tax is to be at the rate of 10 per cent. I must declare an interest here. Businessmen and everyone else will be able to work out the 10 per cent. rate. Everyone lost sight of the position with purchase tax; none of us knew how much he was paying.
Many prices will come down under VAT. If Labour Members think that customers do not go to weights and measures departments to complain they have another think coming. There is quite a number of barrack room lawyers among the customers. After the Trade Descriptions Act came into force I heard about a customer who took a 2s. collar stud to his weights and measures department because it was stated to be of mother-of-pearl and he did not believe that it was.
I come next to children's shoes. When my children arrived I was told that So-and-so's shoes were good for their little feet, and all three of my children had shoes of that make. By the time they had finished with them a consumers' organisation had found that they were the worst possible shoes for children's feet. Therefore, I am very pleased that in exempting children's shoes from VAT my right hon. Friend has made the proviso that they should be acknowledged to be healthy for the children. In view of what he has done about chocolates and sweets, I think that although we may have got rid of the lobby on tees we shall have a lobby on teeth.
I have noticed an incredible change in my constituency in the past three years. Going around some of the 440 factories there, I see different attitudes, new tools and new techniques—all because the people have been motivated by tax reductions. It is absolutely and completely right that that should be so, and I hope that we shall be able to carry on reducing direct taxation.
Lastly, in the words of the Leader of the Opposition, I should think that this Budget has left all the political options open if we have to have an election between now and Chirstmas.

6.41 p.m.

Mr. Laurie Pavitt: I had the fear for a moment that the hon. Gentleman the Member for Brighouse and Spenborough (Mr. Proudfoot) was going to try to emulate the marathon effort of the right hon. Gentleman the Chancellor of the Exchequer. I shall not attempt to follow his wanderings down all the byways, but he spoke time and time again about change, and certainly this Govern-
ment have changed. Almost all, the


policy with which they went to the electorate has changed. They have done a U-turn since then, and come back in the other direction.
The hon. Gentleman emphasised his adherence to, acceptance of and desire for, growth, but he probably failed to look at the small print. In his profession he always has to look at the small print, If he had done he would have seen that the Chancellor said "growth until and unless", so it may well be only a limited period before we have to retrench. He almost indicated a summer or autumn Budget.
I want to talk mainly about the blind, the disabled and the chronically sick, but first I want to touch on a number of points made by the right hon. Gentleman in his opening address on the Budget. This is my fourteenth Budget, and I must confess that I thought that the right hon. Gentleman did extremely well in speaking so nearly to the exact two hours. I welcomed the fact that when he got to his peroration, when I felt that perhaps it was going on for ever, his voice took on a bit of life and colour. I enjoyed the peroration very much indeed, as it presaged the end of a long speech.
I want to take up the right hon. Gentleman on a number of points. Like most hon. Members, I welcome the fact that the Government are going to give rate relief after 10 per cent. increases, but I should like the Treasury to address itself to the problem in constituencies such as mine. In my constituency there is an extremely good brewery called Guinness, which makes an excellent beverage. Mine is a working-class area, and two-thirds of my constituents live in shared accommodation, many of them sharing lavatories and bathrooms. What will happen is that Guinness, which makes a good profit as well as good beer, will find that its rates are reduced, while some of my poorer constituents living in railway cottages will find that their rates are increased? When the Financial Secretary to the Treasury prepares his arrangements with local authorities and his Finance Bill I hope that he will address himself to what can be done in cases where, because of the Government's wish to help industry, they have changed the ratio of rates in a way that will hit the hard-pressed people who live in rented property and have to pay rates through

rents and relieve profit-making concerns who can afford to pay.
I welcome very much the incentive to saving by raising the tax-free amount from —21 to —40 on Post Office and trustee savings banks, but I ask the Treasury why, if we are to have "Save As You Earn" we do not have "Save As You Spend". The hon. Gentleman knows that the Co-operative movement is a large repository for working-class savings. Unfortunately, the success of the movement has been due not to its high ideals and its social purpose—which remain important—but to the fact that in 1844 it was discovered that it was possible for working-class people to save as they spent by means of a dividend on their weekly food bills at the end of each half year. A large percentage of working-class savings accrued in that way, by the housewife spending money and having her nest-egg in the Co-operative Society. But I am afraid that no Chancellor of the Exchequer, even in the six years during which my party was in office, has seen fit to encourage people to leave their money in the Co-operative instead of spending it. The same kind of tax advantages should be given to people who have their money in a Co-operative Society as to those who save in Post Office Savings or trustee savings banks.
I welcome the action on children's shoes. I shall look with great interest at the report which the Chancellor announced. I only hope there will not be the same kind of institutional, workhouse approach, with the official shoes—the State shoes—being exempt from VAT but other kinds, for those who want a little variety, not being exempt. That is the kind of mistaken approach that was made in the case of children's spectacles. If children want to wear a smart, socially acceptable frame they cannot have it on NHS; they have to wear steel frames. I welcome the shoe concession very much, because there is no doubt that in terms of orthopaedic surgery one of the biggest problems, not only with the young but with the old, has been caused by bad shoes and by the fact that in the past mothers have been unable to change their children's shoes often enough when the feet were growing rapidly.
Moving from Guinness to biscuits, I have in my constituency United Biscuits, McVitie Price. For many years I have


been concerned not so much with the question of crisps and ice cream as with the purchase tax on chocolate biscuits. In my area there are nearly 13,000 old-age pensioners for whom a chocolate biscuit with a cup of tea is one of their luxuries. I am therefore very pleased that the Chancellor has been able to exempt chocolate biscuits from the 10 per cent. VAT.
I am concerned mainly with the effect of VAT on charities and the complete omission of any provision for our blind and disabled people. As a result of the change from purchase tax to VAT people will be subject to VAT who have never been subject to any other form of taxation. I take as an example the Wireless for the Blind Fund. Blind people are given radio or television sets on a permanent loan basis, for which they pay about —15. That means that under the new arrangement blind people will be paying a 10 per cent. tax on the —15 they pay for their radio. Talking-book machines are another example. About 9,000 talking-book machines a year are used by blind people, and VAT at 10 per cent. will apply to them. When the Treasury is preparing the Finance Bill I hope that some of these matters, on which I shall be moving amendments otherwise, will be taken up.
The Royal National Institute for the Blind has raised a number of points on the whole question of the provision of apparatus and also in connection with holiday accommodation. Many charitable bodies provide such accommodation for the disabled, the sick, the elderly and the blind at heavily subsidised rates. From now on all these holidays will attract 10 per cent. VAT. The same applies to blind people who live in hostels and homes. The running costs will inevitably rise by 10 per cent. on the whole of the provision of material goods, furniture and furnishings, all of which the hostels have to provide and renew. The right hon. Gentleman has exempted food, but a whole series of items and all services will attract the 10 per cent. tax.
I listened carefully to the charity exemptions, but I noted that these will not include convalescent homes. I hope that they will be given some consideration. Many charity convalescent homes are run at almost nominal charges. One of

these is the Mary Macarthur Homes. Opposition Members have a sentimental attachment to these, because Mary Macarthur was an extraordinary woman. She was a trades union pioneer who, in 1880, came from Ayrshire to England to do something for the working-class people here as well as in Scotland. The homes have done a tremendous job for ordinary working mothers who are tied by their family and need a holiday but cannot afford it. In spite of the fact that the mother pays only —8 a week, these homes are not exempt and the 10 per cent. VAT will have to be paid on that sum. The Co-operative movement, in which, as the House knows, I have an interest, also runs convalescent homes. There is one in Gilsland, near Newcastle-upon-Tyne, where the patients are elderly people. They have to have a recommendation form signed by a doctor, and the current charge is —18 for a two-weeks' holiday. That means that the old person has to find —18 plus —1·80, unless the Treasury can find some way of making him exempt from VAT.
My last point concerns the relief for earnings of blind and disabled persons. For a long time I have been urging the House—and there is a relevant motion before the House which has attracted a large number of signatures—that the facility given in 1962 to blind persons should be extended to those who are chronically sick or disabled. At present the relief for earnings of blind persons is —130 per annum, disregarded for tax, and this has not risen to any extent since 1962. I am urging that the amount of disregard should at least take account of current changes in the value of the pound and current prices.
The whole object of the exercise in which the Secretary of State for Employment is at present engaged—four experimental studies on how one can get chronically sick and disabled persons, blind persons and deaf persons into the community, not only working in sheltered workshops but taking the whole responsibility of working as an ordinary person within the community—rests on the fact that these people will be willing and will want to go out to work. But if, when they do go out to work, they find that taxation takes away a greater percentage of their earnings, the incentive to them to continue to work will not be so great.
In 1952 a Government committee recommended that there should be a disregard for such people, and it took 10 years to get it. I was not in the House at the time, but I express now my gratitude to the hon. Member for Plymouth, Devonport (Dame Joan Vickers) and a number of hon. Members opposite who managed to get it done in 1962. It was not until that year that the disregard of —100 was given. But it is now 1973, and that —100 should surely be raised to at least —200 or —250. That would not be raising the figure in real terms; it would merely be keeping pace with the change in the cost of living since 1962. I urge the Chancellor to give serious consideration to this point, which concerns very needy and worthy people.
This seems a very mixed Budget. It is rather like the curate's egg. We always welcome what we like in a Budget and object to the parts that we do not like. I welcome certain parts of this Budget but I feel that the right hon. Gentleman has basically failed to ensure that justice is seen to be done between those sections of the community which received the large concessions last year and those which are being asked to pull in their belts this year. I hope that we shall eventually achieve a greater amount of social justice in the fiscal arrangements which the Budgets puts before the country each year.

6.52 p.m.

Mr. Edward Gardner: I think that I had the pleasure of following the speech of the hon. Member for Willesden, West (Mr. Pavitt) in the Budget debate last year. On that occasion he spoke, as he has today, of the need to provide relief for the disabled and others who require State aid. I know that he holds that aim very dearly and strongly, and I share it with him. But, unhappily, I cannot agree with his view that this is an unjust Budget. I speak, as we all do today, off the cuff, as it were, because I have not read the Budget statement. I have only heard it. I regard it as a progressive Budget. I believe that it is most remarkable, in that it has been made against the background of a startling international crisis and an equally serious crisis at home.
My right hon. Friend described the Budget as "neutral". With respect, I disagree. I do not think that it is a neutral

Budget—certainly not wholly neutral. It has a positive quality for those who stand in need of help. I congratulate my right hon. Friend on the way in which he has framed it and on the priorities he has underlined in its contents. With each year that passes of his tenure of the great office of Chancellor of the Exchequer my right hon. Friend grows in stature, as I think the House will agree. Even when he makes the most provocative of proposals he is listened to with great respect by both sides of the House. I declare without embarrassment that I am one of his great admirers.
Like other hon. Members, I had many private hopes for the Budget. Some of them were, of course, inspired by correspondence from my constituency. For example, I was urged to give support for the relief of value added tax on charity shops, to see that it did not fall on children's clothing and footwear and, as far as one could do so, to see that everything was done to encourage the Government to increase pensions.
I find, to my pleasure—and, I am sure, to the pleasure of many hon. Members on both sides—that all these things have been done. I am particularly pleased about the relief of VAT on charity shops. Indeed, this morning I had four letters from my constituents containing pages and pages of signatures under the heading of "Oxfam". The signatures were organised by a local branch of that admirable organisation, and the letters asked for relief of VAT on the goods which come to these shops and on goods being sent out to distressed areas. I am very happy that my right hon. Friend has agreed to make these reliefs possible.
There is another matter, on which I should like a reply. It troubles the country greatly and is a matter of no small consequence. It will affect millions of mothers. What will happen about the payment of child credits? My right hon. Friend said, in effect, that mothers would not be paid less by way of allowances for their children than they are at the moment. A Select Committee of the House is considering how these payments should be made—whether they should be made to the father or to the mother.
I plead with the Government to adopt what I believe the majority of people consider to be the sensible solution—to make it possible for the mother to have


direct access to the payments so that she should not experience difficulties—which in some cases could be considerable—in having to recover them from her husband. If the Government could say now that they are prepared to ensure that in future these payments will be made directly to the mother there would be a great relief from the anxiety now felt by many people.
The Budget shows that the Government are out to help the weak, and those who need help. I can only hope—and I say it with all the feeling at my command, and with a genuine expression of anxiety —that this example will be followed by those who are making wage claims which, if pressed to the hilt, could have a disastrous effect on the economy and would greatly affect those whom the Government are seeking to assist in the Budget.

Debate adjourned.—[Mr. Gray.]

Debate to be resumed tomorrow.

GREATER LONDON COUNCIL (GENERAL POWERS) BILL (By Order)

Order for Second Reading read.

Motion made, and Question proposed, That the Bill be now read a Second time.

Mr. Speaker: Mr. Spearing.

Mr. Nigel Spearing: On a point of order, Mr. Speaker. Is it in order for me to speak first or should it be the hon. Member for Cities of London and Westminster (Mr. Tugendhat) who wishes to introduce the Bill?

Mr. Speaker: I was told that the hon. Gentleman was to speak first. Mr. Tugendhat.

7.1 p.m.

Mr. Christopher Tugendhat: In introducing the Bill it would be more appropriate to sit on the cross-benches—if we had them in this House—because it is essentially a non-partisan measure. It has been approved by both parties in the Greater London Council, and many of its provisions relate to the boroughs, some of which are Conservative-controlled while others are Labour-controlled. It is, as much as anything

can be in politics and in this House, a non-partisan measure.
Lest there be any misunderstanding, I make it clear that I am proud of the record of the Tory-controlled GLC and would be happy to defend its record in the election, in canvassing activities and in speeches. Today I shall endeavour to be as non-partisan as the measure. My intention is simply to present the Bill

Mr. Reginald Freeson: Before the hon. Gentleman leaves that rather general and controversial point, would he care to say how he can be proud of a record of 4,000 housing starts per year compared with the 9.000 planned some years ago?

Mr. Tugendhat: If I were to take up the hon. Gentleman's point I should feel the necessity to counter it with other achievements of the GLC. I am tempted to do so, but I feel that it would be more in the spirit of the Bill and the way in which it is being introduced to the House if I stick to the terms of the Bill rather than exchange claim and counter-claim, of which we shall no doubt hear a great deal in the coming weeks. I think the hon. Gentleman would agree that I am not backward in coming forward and talking about London matters. On this occasion, however, I will resist the temptation.
The hon. Gentleman's intervention leads me to make one other point with which I hope he will agree. All of us representing London seats regret the necessity for a London debate on the General Powers Bill. [HON MEMBERS: "Hear, hear."] I am glad to have support on that point at least. We all recognise the necessity for the Bill, and yet, because of the way in which the House deals with London business, it is difficult for hon. Members to raise matters of great constituency interest and of general interest, such as the River Thames.
Because of that they are forced to raise these matters on an occasion such as tonight, when it is not really an appropriate opportunity. Because hon. and right hon. Gentlemen opposite put their names down in opposition to the Bill it gives the impression outside that they oppose it, whereas often they merely want to raise issues which they have no opportunity to raise on other occasions.


I hope that the House will find a more satisfactory way of dealing with this situation. Perhaps hon. Gentlemen opposite will agree with me if I say that if we do not adopt a more satisfactory way many of us at least hope that our debate will not often fall on Budget night. It is a great inconvenience when one has just listened to the Budget speech and would like to be thinking about it to have to revert to other issues.
The Bill has been published for some time and the GLC has circulated documents about it. I will not go into the details at length. I am sure that those hon. Members sufficiently interested in London matters and the provisions of the Bill to have remained behind when they do not have to must also have read the Bill. I know that many others have points which they will seek to raise, and because this is a limited debate the more time I take the less time they will have.
All that I shall do is to mention some of the high points of the Bill, so that those who read our debates outside will realise that we have taken it as seriously as it deserves and so that the Minister may see the context in which our deliberations are taking place. A large number of the early clauses deal with landing places. The opportunity has arisen for the GLC to acquire certain Thames landing places from the PLA and these clauses are designed to empower the GLC to acquire, construct, maintain and operate these places in the interests of its responsibility as the strategic planning and transport authority.
This is a matter of particular interest to the hon. Member for Acton (Mr. Spearing) who has devoted a great deal of his time since he entered the House to the problems of London's river. It is a subject on which he is a considerable expert. Clauses 19 and 20 are also connected with the river because they provide for the strengthening of flood defences. Here we must refer to the Thames Barrier and Flood Prevention Act which we discussed last year. Clause 19 provides for dams relating to the proposed barrier and Clause 20 deals with penalties for interference with flood prevention. I am sure that all of us who live in the area affected must welcome this.

Mr. James Wellbeloved: As the hon. Gentleman will be aware, flood prevention for London is a matter of vital interest. I hope that in his brief from the GLC he will be able to find some information dealing with the progress of the flood defence scheme. Can he say whether the GLC is satisfied that the powers it obtained in the Thames Barrier and Flood Prevention Act are sufficient? Can he give us a progress report?

Mr. Tugendhat: I have received a great deal of information from the GLC about this Bill. Nothing is included in the documents relating to progress on the barrier. I assume—and this is a tentative assumption; I will take advice during the course of the evening—that since the GLC has kept me so fully informed of the things about which it is unhappy this must be one of the things on which it is happy. It is a complex subject and I know that through his constituency the hon. Gentleman has a particular interest in these matters. I will try to secure an answer to his question.
Clause 21 changes the subject completely and updates the existing arrangements for allowances to members of the GLC to take account of the 1972 Local Government Act.
Clause 23 is one about which I feel particularly strongly and I am pleased to be in a position to introduce it. It is designed to prevent the phenomenon knows as "creeping hotels". As hon. Members on both sides know this is a desperately serious and quite disgraceful problem in the middle of London. There have been proposals from boroughs, notably Kensington and Chelsea, to deal with this and at last the opportunity has arisen to get a grip on the problem. That must be beneficial. Certainly in my part of London we feel we have, if anything, an excess of hotels. Many of these are at the higher end of the price bracket. At the higher and lower end it is found that residential property is being used, in effect, for tourists and other transients.
We are desperately short of residential property. We have long housing waiting lists, and many problems arise from the shortage of housing accommodation, and the way in which some housing stock has been misused for this purpose has been quite disgraceful. This clause in the


Bill will make a substantial difference and I am delighted that an opportunity has arisen to deal with the problem.

Mr. Freeson: If I may put a point to the hon. Member at this time in connection with the clause, has he been advised by the Greater London Council how such a planning amendment—because that is what it is—could be policed?

Mr. Tugendhat: The difficulty in answering that question in the context of the Bill is that policing will lie with the boroughs. It will be up to individual boroughs first of all to give or to refuse the changes in planning. I hope very much that they will be stringent in their interpretation of this power. I would have thought that certainly in Westminster, where the problem is serious, the council, through its existing activities, would have the resources to enable it to handle this problem. I know that Kensington and Chelsea, which pioneered proposals along these lines last year, seemed to be in no doubt that it was able to do so. I believe policing is less of a problem than ensuring that the provisions are sufficiently stringently interpreted.
Clause 24 of the Bill is covered by the Housing (Amendment) Bill which I believe has now passed through all its stages in this House. It having received the Royal Assent, this clause will be withdrawn. Clauses 25 to 29 are designed to help boroughs to recover rates without having to go to the extremes of distraint and imprisonment.
I know that these are controversial clauses and that they may have been misconstrued outside the House. It is important, therefore, to emphasise that their object is to enable the boroughs to take a more lenient rather than a harsher line. There are occasions when rents are not paid for a variety of reasons when the only choice open to the boroughs is either distraint and imprisonment, on the one hand, or to let the matter rest on the other, and plainly this is sometimes too extreme a choice. These clauses are designed to make rates a charge on the premises and recoverable, therefore, in the event of sale or death. It is a device to enable the boroughs to take a more lenient attitude on those occasions when the circumstances of the ratepayer are such that the more extreme action which

at present is open to them would not be appropriate.

Mr. A. W. Stallard: Is the hon. Gentleman saying that these powers are in lieu of or in place of those existing, or in addition to those existing?

Mr. Tugendhat: The boroughs still could go to the extremes of imprisonment and distraint and there are circumstances in which such action would be appropriate, but they now have an alternative, a softer option, and this is a useful addition. These provisions are in addition to, not instead of, those already existing.
Clause 30 blocks a loophole in the Food and Drugs Act. Danger arises in that situations can occur in which a conviction takes place involving an individual, but the offending premises can then be used by another individual for a period of time before the necessary countervailing action can be taken. This is an abuse with which cities other than London have had to deal. It is a wellprecedented clause. Manchester, Derby, Port Talbot and Coventry have all introduced or sponsored legislation along these lines. The object of safeguarding public health by making quite sure that premises which have been operated by somebody who has been convicted cannot be used continuously is desirable.
Clause 31 is designed to give the public in coin-operated laundries the same protection in dealing with the machines in those establishments as workers have in factories. Various Factories Acts provide a high standard of safety in factories where dangerous or potentially dangerous machinery is in operation. This clause is designed to give the public the same protection in coin-operated laundries as is given to people who work in factories with similarly dangerous machines.
Clause 32 is designed to bring the consumer advisory and protection service into line with the latest practice as established under the Local Government Act, 1972. The London Boroughs Association has asked for this. The Association believes that the changes advocated here will establish a consumer advisory and protection service greater than at present and also provide pre-shopping advice.
I believe all of us would agree that this is not only in keeping with the spirit


of the times but that improvements along these lines are particularly helpful and desirable in an area such as London, where the opportunity for people to deal with corner shops and small shopkeepers and, as it were, to know the state of the market in their shopping is much less than it is in small towns and in the country. Help along these lines is certainly desirable. Clause 33 deals with the maintenance cost of children in care.
These are the major provisions of the Bill. There are other clauses which I have not mentioned to which other hon. Gentlemen may refer during the debate, and I will endeavour to handle any questions which arise. Otherwise, I will certainly promise to ensure that the Greater London Council replies to any points which arise in this debate. My experience is that during the course of a debate unexpected points tend to arise and I will endeavour to get answers for hon. Gentlemen.
I should like to end my speech at this point so that hon. Gentlemen on both sides can raise matters of interest both within the direct provisions of the Bill and perhaps sometimes moving a little outside. I commend this Bill to the House.

Mr. Freeson: Before the hon. Gentleman sits down, may I point out that he has not touched on Clause 34? Could he advise us why there is no reference to a development fund being established, or to power to establish such a fund being placed with the Greater London Council as well as with the boroughs?

Mr. Tugendhat: I regret that I am unable to provide the hon. Gentleman with that information but I will do my best to obtain it for him.

7.18 p.m.

Mr. Nigel Spearing: I believe the whole House will agree that the hon. Member for the Cities of London and Westminster (Mr. Tugendhat) has contributed signally to the debates we have had in this House on London matters. I recall particularly his contribution on 15th December last.
I agree with him that there are devices which we have necessarily to use to ensure that London matters are discussed. I believe that in relation to its area, London is the most densely-membered area of the country, having, I believe, more

Members than the whole of Scotland. Therefore it is right that we as a House should have time to debate London matters, and I am very glad that we have achieved that this evening, although perhaps, unfortunately, overshadowed by other events.
The powers of the Greater London Council which we are discussing this evening in the General Powers Bill are related directly to the powers contained in other statutes, and in terms of effect, at least, to what the Government decide to do and what the Government decide the GLC shall or shall not do. It is right, therefore, that the Government should have a listening ear. We are pleased to see the Under-Secretary of State for the Environment, who will be able to hear the views of hon. Members on both sides of the House on many non-party matters which worry London people. I shall try to deal with matters as objectively as I can in the first instance and deal with party differences in a self-contained addendum.
One of the marked characteristics of our debates is that hon. Members representing London constituencies are able to look at the problems of London as a whole and to differ on the solutions. There will be a choice of solutions next month for the citizens of London when they go to the polls.
I wish to deal with three broad aspects. I first wish to comment on the Layfield Report. Secondly, I wish to refer to the docks study about which we have heard but which we have not seen and, thirdly, I wish to comment on matters concerning the River Thames which arise from the Bill.
No doubt there will be a debate on the Layfield Report in Government time, but some matters which bear on the powers and responsibilities of the GLC should be discussed tonight because they are relevant to the way in which the GLC and the Government make decisions for London in the near future.
Since our debate last December, it has become more widely known that London faces an employment crisis, not in the sense of the unemployment which is a feature of the development areas but in the imbalance of employment. The Layfield Report did not come to that conclusion. Nearly every public representative, whether parliamentary, GLC or


borough, would disagree with the findings of Layfield. The Secretary of State for the Environment, in paragraph 17 of the Statement which he circulated but did not read, said this of the Layfield Report:
On specific issues they regard the policy of seeking to reduce the rate at which jobs are leaving London as unjustified. The GLC feared that a continuous exodus of jobs would have an adverse effect on the income of Londoners, principally by removing the jobs which earned good incomes; but the Panel, after a lengthy review of the complex evidence on this difficult subject, have come to a quite contrary view: that on balance a continuing decline in population and employment at recent rates is likely to produce greater benefit in living and working conditions for everybody concerned—both those who stay and those who leave.
I am worried about that finding, because everybody to whom I have spoken believes that the opposite is true. Many of the people who go to new or expanded towns under the ægis of the GLC are skilled or semi-skilled and are relatively young, perhaps with growing families. One reason why they may be given priority for movement is that they have housing problems. They leave behind a relatively ageing population, thus making the age and social balance in certain areas more critical than it would otherwise be. That argument can be justified by evidence from academic sources which I have read. But for some reason which I do not understand the Layfield Panel does not come to that conclusion.
Paragraph 5.71 of the report reads as follows:
We were not presented with any evidence which shows this assumption to be true …
That is the assumption that the number of jobs is rapidly running down.
… and we, therefore, see no need for the policy in order to achieve the aim.
The aim was to slow down the rate. In paragraph 25.16 the panel reports:
Voluntary movement by firms out of Central London, in co-operation with their workers, is indeed to be encouraged, but a policy which deliberately restricts growth in the centre in order to put jobs closer to homes is not.
The first part of that sentence refers to the official policy of the Government and the GLC to move out of London industry that can as well be carried on else-

where. Employment in the manufacturing industries in London has been going down rapidly. Various estimates have been made of how many years it will take before there is no manufacturing industry in London. The Layfield Panel may not face that prospect with qualms, and the Government may not. In view of increased specialisation in towns throughout Europe, this may be a natural consequence of increased efficiency and industrial reorganisation. But I suggest that the social side effects of such a policy would be disastrous.
In 1966, 1,431,000 people were engaged in manufacturing industries in Greater London. By 1970 that number had been reduced by 177,000. The unofficial figures show that in one year, between 1970 and 1971, that number went down by more than 50,000. That rate of reduction may begin to smooth out in a few years' time, but anyone who lives in an industrial area of London knows that there is a critical balance in the so-called pool of labour and experience and the structure of sub-contracting industries and trades, and that after a certain point has been reached the run down is more rapid and harder to arrest. I hope that the Government will urgently pay attention to this phenomenon and question closely whether the Layfield conclusions on this matter are correct.
The conclusion of the Layfield Panel which I read in my last quotation concerns employment in central London. We touched on this in our debate on 15th December, when my hon. Friend the Member for Holborn and St. Pancras, South (Mrs. Lena Jeger) referred to answers she had received to Questions about office space. She said that she was told on 20th November 1972 by one of the Ministers in the Department of the Environment that 9 million sq. ft. of office premises were unoccupied, 11·1 million sq. ft. were under construction and another 8·6 million sq. ft. were the subject of planning permission but had not been built. Those figures add up to nearly 30 million sq. ft. over and above the office accommodation already occupied.
Much of this empty office accommodation is in central London, and we all know the office blocks in question. In that previous debate we anxiously waited


to hear the Minister for Housing and Construction say what he intended to do about this. We also wondered whether the Chancellor of the Exchequer this afternoon might say something about it. He said something that may have a marginal effect, but the pledges that were given by a former Secretary of State for the Environment have not yet been fulfilled. These empty office blocks represent a waste of resources and create an artificial office market which has repercussive effects on property values throughout London. When the value of an office development is artificially high, site values are likewise over-valued. The inflation in site values and accommodation throughout London, which everyone agrees is a curse, is an effect of this office market syndrome. I hope that if he intervenes the Under-Secretary of State for the Environment will be able to tell us something about that, because many people in all parties in London are very much concerned about it.
The next subject dealt with in the Layfield Report on which I wish to speak is that of transport. No doubt at a later stage there will be a lengthier debate on it, and it would be wrong to go into detail now. Since this is the first time that we are able to give our reactions to the proposals concerning roads, about which everyone was surprised, it seems appropriate to do so now. The report talks about the great housing crisis in London and recommends drastic measures to deal with it—measures which have been foreseen by my colleagues at County Hall and to which my hon. Friend the Member for Hackney, Central (Mr. Clinton Davis) may make reference. But the report recommends a road pattern which would mean that 10,000, more or less—in any case a substantial number—of houses would have to be pulled down to provide for Ringway 1.
It may be that many of those houses will need to come down in any case, but probably many of them would not need to be pulled down. It seems extraordinary that this plan would do the most social damage by having the road go through areas which are already under social stress. It may be that the environment of those areas is not so pleasant as that of others further out in the area of the proposed Ringway 2 and Ringway 3, but that does not mean that environmental

stress should be piled on to the very great social stress which is already present.
My second question concerning transport is about public transport. The most significant paragraphs on this are contained in pages 361 and 362 of the report, dealing with fares. Whatever the convenience such as interchange or through-ticket arrangements, the total cost in the weekly or monthly budget of through movement by public transport is the important point. It is a reflection on the inadequacies of the Greater London Development Plan revealed by this report that almost at the same time as the report was made public the Secretary of State for the Environment saw fit to establish with the GLC a pane] to investigate a rail plan for London. These physical plans were left out of the Greater London Development Plan. I think that was an admission of failure.
Of course the road plans cause great controversy. I understand that the Secretary of State accepts certain things and leaves out others. That seems illogical. He has accepted the road plan apparently to deal with what he calls "congestion in London". I know that some people occasionally experience congestion in London. We have heard that on a famous occasion the Prime Minister experienced it. But what is not realised is that in general traffic in London is flowing relatively fast, indeed faster than it was 10 years ago. The Intelligence Unit Quarterly Bulletin of 16th September 1971 published figures to prove this. I will not quote the figures but I quote the conclusion:
Off-peak speeds average 12 miles per hour in the centre, 17½ miles per hour in inner London, 24½ miles per hour in the outer areas, and 32 miles per hour on primary roads.
Since 1962, the average speed on the primary network has increased by 3 miles per hour, largely due to the construction of new motorways, and has remained virtually unchanged on other roads. Meanwhile, traffic levels have risen by about 50 per cent.
I stress that in general traffic is flowing fast. It is only when a lorry breaks down or some such event occurs that traffic builds up. This is increasingly true on main motorways between cities. Those of us who listen to the radio almost every morning hear of a motorway where some accident has occurred and motorists are advised to take an alternative route. But there are not objective surveys of the


actual amount of congestion, nor is the congestion compared with what it might be or what it was before the war. There is a great question whether the apparent reason for constructing Ringway 1 is congestion in Greater London.

Mr. Toby Jessel: Would the hon. Member agree that the improvements in the average speed of traffic in London to which he has just referred have been achieved largely through the work of the GLC by computerisation of traffic lights, traffic management schemes such as clearways and waiting restrictions, and no-right-turns, one-way streets and so on? Would he agree that the number of such traffic management schemes has been very large over the last five or ten years, but that the scope for these is coming to an end and that there are not many others which could be effectively employed? When that limit is reached, further improvements in the speed of traffic flow can be attained or maintained at the present level only by construction of new roads.

Mr. Spearing: I am glad to agree entirely with the first part of the hon. Member's intervention. I spent many hours with him and many of his colleagues working on the schemes that he mentioned. He was quite right in what he said in the first part of his intervention, but I did not agree with the second part. He suggested that we have reached the limit to which traffic management schemes can go.

Mr. Jessel: Near the limit.

Mr. Spearing: Near the limit. He said that to improve traffic movement we have to build more roads. Many of my colleagues and I say that that is illogical. First, the population of Greater London is going down—going down faster than the GLDP suggested it would. The increase in total motor mileage in London is not so fast as the GLDP estimated. Thirdly, if we built more roads, particularly of the kind which the hon. Member and his Friends advocate, we should be increasing the number of people who wish to use cars over and above anything that is needed in the provision of secondary roads. Therefore we should move to public transport to maintain the balance

and make it easier for people to change from private transport to public transport. I am glad that the hon. Member made the point because it illustrates a party difference which will be of increasing importance in the next few months.
I turn to "the report that never was" That is the consultants' report on a very important part of London east of Tower Bridge which is generally referred to as the docklands. It would be right to rehearse the history of this study because many hon. Members on this side of the House are very gravely worried at the way in which that has been presented—or not presented—to public representatives and to the public.
A few weeks ago the Secretary of State for the Environment told the House that a consultative study giving a number of options for the development of this very important area of London would be published on 5th March. There were various leaks of this study, and indeed in today's newspapers we have descriptions of the so-called options for this area produced by the consultations at great expense. But yesterday when I went to the Vote Office to ask for a copy of this study —a document which I thought would have been placed there by the Department of the Environment—I was told that they did not have a copy. Therefore, I telephoned the Greater London Council this morning and asked whether I could have a copy of the study which was published yesterday. They confessed that although they had some responsibility for the document, there had been some delay either at the printers or on the part of the consultants and they had only three or four copies in County Hall, and even those copies were not available.
This is not the standard of public administration that we expect. First, I question the wisdom of the Secretary of State for having come to the House to give us a foretaste or trailer of what was to come and then, when the great day arrives, providing no copies of the report. The powers of the GLC will be crucial in this area of London, and the GLC is carrying out a vast public relations exercise in consultation with the people of the area. What is the use of such an exercise when even a short version of this study is not placed in the hands of hon. Members when the House is discussing the Greater London Council (General


Powers) Bill. I fear that this is characteristic of some of the methods adopted by the present administration, but it is not good enough and I hope that the Under-Secretary of State will be able to give some information, if not an apology, on this point.
The study gives me great cause for worry because, if we are to believe the Press reports, there are to be five self-contained options for an extensive area on either side of the Thames encompassing several London boroughs and providing in detail a number of imaginative schemes. This is rather on the lines of architectural consultants being given a plot of land of 20 or 30 acres and being asked to provide a number of alternatives in terms of housing and other activities within that area. Some would solve the problem by suggesting the installation of ponds or pools, others would advocate high-density housing, and others would put forward low-density park space. That may be all very well for a 20-acre or even for a 100-acre plot of land outside a city or new town, but many of us know that the dockland areas cannot be considered on those lines.
The dockland area is not an area which has been razed after bombing or following some natural disaster, but is very much a going concern. There are considerable industrial and commercial enterprises at work there and a large number of people live there. It is certainly not a virgin site from which one is starting from scratch. Yet from the way in which the study has so far been presented, one would imagine that it was a virgin site. It is felt that a new agency is required to deal with the area since many parts of the area have common features. Certain financial problems will have to be resolved, and perhaps some new mechanism will be required.
What is forgotten is that large and efficient London boroughs are already involved within these areas—for example, the London boroughs of Tower Hamlets and Southwark, which have large areas of land within the so-called dockland area. Any mechanisms which are introduced to help to rehabilitate and develop these areas must have some connection with the London borough councils which are already there and which are the planning authorities. There must be some convenient marriage between existing

statutory authorities and there should be full consultation with the local authorities if the Minister decides to introduce any new mechanisms.
Local authorities are already complaining that they have not been adequately consulted and I suggest that both the local authorities and the Member of Parliament concerned should be consulted before the Minister suddenly announces his decision about any statutory mechanism which he proposes to introduce to deal with various developments.
The consultant studies assume that the Royal Docks will be available for development. This is an unjustified assumption because the Royal Docks are an integral part of the Port of London. The docks are important particularly in terms of ship repairing and for laying up purposes. Therefore, for many reasons it would be both premature and wrong to assume that, even within a measureable time, they will not retain a water function and be part of the port.
Finally, I would emphasise that if there is to be any redevelopment in this area there must be jobs to go with it. I have already asked the Government about their proposals for a new town for the possible third London Airport at Maplin. I do not know whether they have considered that the Maplin area could provide jobs for the people in the dockland area. There will be many jobs available and it will be better to use the dockland area than to take people to a new town.
I feel that it is appropriate to concentrate on Part II of the Bill which makes provision for the Greater London Council to take over from the PLA responsibility for piers in the centre of London. I feel that it is right at this stage to recall a very great ex-Member of the House of Commons, Sir Alan Herbert, who for many years rightly criticised the LCC and the Minister of Transport for their conduct in respect of piers. I remember a caption written by Sir Alan which appeared beneath an illustration of old Waterloo Bridge and which went something like this:
In the far distance is the site of the Temple pier, which was towed away by the LCC Nearer to the camera is the police pier where one may not land. On the left of the picture is a recess in the embankment for a pontoon There is now no pontoon. Behind the photographer is Charing Cross pier on which there is a notice 'Danger Keep off. L.CC property'.


The bridge in the picture is Waterloo Bridge which is falling down.
That was in 1932 and it is at least something that we have moved on a little way from then and that the GLC is not only taking over these piers but is taking additional powers to construct a few more. In this respect the GLC is to be congratulated, and I hope that these rather complex clauses will be adequate to deal with a difficult task of taking over the management of these piers—and possibly, later, the river as well.
Clause 4 deals with powers to dispose of piers. I hope that the GLC will not decide to dispose of any piers which it purchases or constructs on a waterway. Piers are public places where one can land. In London it is difficult to land anywhere where there are not piers. For any pier to be leased or disposed of in such a way as to prevent access to it by the public or by watermen plying for hire would be a retrograde measure. In the Queen Anne's reign there were 40,000 watermen plying for hire on the Thames between Gravesend and Windsor. Unfortunately, there are far fewer today. It would be wrong if the places where they could ply for hire were reduced in any way.
Clause 6 deals with temporary closure of piers. I hope that at some stage the GLC will agree that before it can close piers under the byelaws available in the clause it will consult those most closely responsible for providing river services. Sometimes local authorities act a little arbitrarily, and there should be some safeguards.
Similarly, Clause 15 is a safeguarding clause. There are agreements which may or may not be in operation at the moment and these might be looked at carefully. In river management there are many hidden pitfalls, and in the Thames ancient rights and mediæval practices still to some extent hold sway.
The GLC is now entering into a new field. The House should know that last week in the Committee on the Water Bill the Under-Secretary of State for the Environment suggested that the GLC may take over not just the piers but in due course the powers and responsibility of the Port of London Authority between Teddington and the barrier site. That is

an improvement which many people have advocated for some years. The river in central London forms a coherent whole between these places and will play an increasingly important part in what we hope will be a better central area. Such powers are not in the Bill. They will no doubt require a separate Bill if the Secretary of State's suggestions come to fruition.
I deplore in some ways the circumstances which made the Under-Secretary of State's announcement necessary. I think that they were part of another deal and were not put forward necessarily on their merits. It so happens that the proposal for the GLC to take over from the PLA the upper London river has some advantage. I look forward to a future debate on the general powers of the GLC. If the hon. Member for the Cities of London and Westminster introduces such a measure it will probably meet with complete accord on both sides of the House, which will not necessarily be achieved tonight.

7.53 p.m.

The Under-Secretary of State for the Environment (Mr. Reginald Eyre): I think that it would be convenient to this House if I intervened briefly at this stage. Although I shall be very glad to note carefully the points that are made by right hon. and hon. Members who are privileged to represent London constituencies, I regret that it is not appropriate for me on this occasion to comment on the points made by the hon. Member for Acton (Mr. Spearing) about office development or employment. I regret the delay in making the dockland report available. I willingly apologise to the hon. Gentleman. As he will know from his reading of the newspapers, certain factors are having a disruptive effect on the timing of matters of this kind. However, the report will be available shortly and with the minimum possible delay.
I shall refer to the practical points which the hon. Gentleman made about dockland. As he knows, a short booklet will be published after the report is published. The next step will be to canvass public opinion on the results contained in the report. For that purpose a major public participation exercise will be launched, a programme for which will be announced later. Decisions will also need


to be taken in consultation with the Greater London Council and other local authorities concerned on the machinery necessary to carry out the redevelopment of the area. I appreciate the importance of that matter. I assure the hon. Gentleman that there will be full consultation about the machinery.
The hon. Gentleman also referred to the Port of London Authority's operations. Decisions about any dock closures are dependent on the operational planning of the Port of London Authority. The development possibilities for the purposes of the study are based on the consultants' assumptions, which do not commit any of the parties concerned. I hope that my brief reference to those two points will adequately reassure the hon. Gentleman.
I shall say little about the Bill on behalf of the Government. It is generally acceptable to the Government. There are one or two conditions which should assist central London boroughs to cope more effectively with some of their most important problems. My right hon. Friend has a number of minor reservations about the Bill, but these mainly concern drafting matters which we hope shortly to be discussing with the promoters. All that I have to say about the Bill, which was so ably introduced by my hon. Friend the Member for the Cities of London and Westminster (Mr. Tugendhat), is that I hope the House will decide to give it a Second Reading and send it to a Committee. The members of the Committee will be in a much better position than we are to examine indetail the issues involved. They will have the added advantage of hearing expert evidence.

Mr. Clinton Davis: Will the hon. Gentleman elucidate one point that he made about the Bill? He said that it materially assists the solving of the problems of central London boroughs. Presumably, he was referring to the stress areas, such as my constituency. Will he indicate how the Bill deals with the problem of homelessness which now afflicts my constituency, with the scandal of the misuse of improvement grants, and the way in which landlords abuse their rights in relation to tenants? I cannot see such provision in the Bill.

Mr. Eyre: The hon. Gentleman has raised on a number of occasions the serious matters to which he has just referred. On behalf of the Government, my right hon. Friend and I have always been prepared to discuss those matters in detail with the hon. Gentleman. However, the purpose of the debate is to deal with the proposals of the Bill, which, as my hon. Friend said, in introducing it, was brought forward with the agreement of both major parties on the Greater London Council. The planning provision regarding temporary sleeping accommodation is one of the items relevant to the problems in central London. The members of the Committee will be in a much better position than we are to examine in detail the issue involved. They will have the added advantage of hearing expert evidence. I commend the Bill to the House.

7.59 p.m.

Mr. Reginald Freeson: I was glad to hear the Under-Secretary of State's general welcome for the Bill. There are things in it which, as he and the hon. Member for the Cities of London and Westminster (Mr. Tugendhat) indicated, were put forward by both parties on the GLC. I was a little disappointed that the hon. Gentleman did not extend his remarks a little further, particularly that certain clauses of the Bill will provide substantial help for central London boroughs in handling some of their most serious problems. He had the opportunity to respond to the intervention by my hon. Friend the Member for Hackney, Central (Mr. Clinton Davis).
I want to touch on one or two features of the Bill. In doing so I hope that my remarks will be of direct relevance to the clauses in which I have a special interest. I begin almost back to front, by welcoming Clause 34. I do not know to what extent the Under-Secretary realises the implications of the clause, to which he gave a general acceptance on behalf of the Government. I was delighted to hear it.
If the power given in the clause is used fully by London boroughs it will open up great opportunities in terms of freedom of action from Government interference financially, and will provide more scope for urban renewal in its broader


sense. What is more, it will do both at great savings to the ratepayers.
Perhaps I should explain those remarks at slightly greater length. The clause refers to powers being granted to the London boroughs to establish individual development funds and sets out the formula upon which they may operate and the ceiling to which they will be empowered to establish such a fund. In any one year it may receive a contribution of four times the product of a penny rate.
My own borough is not untypical, though obviously the figures will vary from borough to borough. It means that if the borough of Brent decides to use the power it will be able to make a contribution of £340,000 in any one year to such a development fund. The clause goes on to provide that the maximum ceiling permitted at any one time shall be 16 times the product of a penny rate. In my borough that would produce a figure of £1,360,000. I should love to see every London borough establish a development fund of that order.
I am reminded of my question to the hon. Member for Cities of London and Westminster. I understand why he could not answer it off the cuff. Obviously, he did not have the background information. I look forward to an answer in due course. The clause should be redrafted to cover the GLC. It is not good enough for the GLC, in its General Powers Bill, merely to be the vehicle for the smaller authorities in London—the boroughs—to establish development funds. The GLC should itself be taking power.
I am aware that because of its immense financial resources the GLC can spend a good deal more from revenue on capital works than can any London borough or, for that matter, any other authority in the country. It is spending about £20 million a year on housing by way of capital raised from revenue, as distinct from borrowing. I realise that there is not the same economic pressure on the GLC. However, I suggest that this concept of a development fund for the improvement, redevelopment and development of whole areas is needed by the GLC if it is to implement its planning powers sensibly and positively in a way that it has signally failed to do for a number of years. My hon. Friend the Member for Acton (Mr.

Spearing) illustrated this point with a number of examples—

Mr. Ronald Brown: It will be within my hon. Friend's memory that I mentioned in this House the fact that the GLC refused to authorise open spaces in my constituency on the basis of the puerile argument that it did not have sufficient money—and that was in respect of only two or three acres which required development.

Mr. Freeson: My hon. Friend tempts me to pursue my argument on planning procedures. I am not speaking now of planning control but of more positive planning in the shape of urban renewal. This is a matter where local government generally still has a great deal more to do in terms of the organisation of its departments and its finances. It will be enabled to do it by effective Government action and if central Government and local government organise the financing of urban renewal on more coherent and long-term lines.
I welcome the concept of development funds. However, it is important for the GLC itself to establish such a fund. If some reference to the GLC were written into the clause and it used such a power, in any one year it could produce a contribution to a development fund for London of £72 million, and if the ceiling laid down-16 times the penny rate—were applied the fund would be £280 million. That is not an unimportant capital fund to have available for longterm positive planning.
Anyone who has had experience in local government and of the relationship between it and central Government in trying to get capital programmes going and maintained over a period of years will know the importance of establishing this kind of reserve so that there is flexibility and the capacity to move over a longer period of time than just from one year to another or from one period of two or three years to another period of two or three years, in terms of programming.
I could quote instances from my own area of redevelopment schemes being held up for want of some amenity provision because spending the necessary money would require either an extension of the locally-determined Vote head which the Government laid down or the inclusion


of open space provision under the general freedom of action in terms of capital expenditure on housing. The Ministry has refused the latter, and the locally-determined Vote heads are by no means big enough—and will not be big enough for years—to allow the local authority to lay out the urgently needed open space and amenities for an area which has been redeveloped over the past seven to 10 years. Land has been bought, and is standing developed. The local authority wants to get the open space provided with various amenities to complete an urban renewal scheme in what has been our worst slum area. It cannot do so because of the financial inhibitions of this Government. It is there that I see provisions of this kind coming to the aid of local authorities.
I resist the temptation to discuss the matter further, though it is of tremendous importance, but I urge the GLC—if not the present regime, then any new administration which may follow the elections next month—to reconsider this matter. The matter may be pursued further in Committee, and the clause may be amended.
My next point is a general one on planning, which my hon. Friend the Member for Acton discussed at length. I want to deal with only one aspect. There is a need for better planning in London, in the positive sense to which I have referred. I hope that I do not sound arrogant, but I watch what is going on from an arms-length distance, and in my view there has for years been a need to give the planning department at County Hall a more effective role. It is still far too much an advisory department, which is dominated by road engineers' planning.
We come back to the motorway problem, which was raised by my hon. Friend the Member for Acton. Nowhere is this lack of effective planning policy and machinery in action to be seen better than in the whole mess into which we have got with the motorways. From the start, up to the public inquiry under Lay-field, the planning of motorways in London has been divorced from general town planning considerations.
Some years ago, when the proposals were first formulated and put forward for discussion, planning departments at borough level were pointing to the failure to plan roads in relation to the

total neighbourhood planning of the areas in which they were proposed to be put. I am not talking about the bandwagon of action against motorways in various parts of London—and I do not say that in any way cynically. These comments were made at length and in detail by local planning departments when the schemes were first formulated. From the time that Layfield called for further information—which was not available—on matters relating to housing connected with the motorway proposals right up to today, the planning of these motorways has virtually been divorced from general town planning considerations.
It is said that 15,000 homes are involved. We do not know for sure, because of the qualifications and reservations which have appeared in the Lay-field recommendations. In Brent about 1,500 homes are involved. I assure my hon. Friend the Member for Acton and others that a high proportion are very good, not poor, homes. There might be some sense in trying to relate new motorways to areas which are in need of redevelopment and reshaping, pulling down, and rebuilding houses in the same time span as the motorways are being built, but that is not what is being planned. The motorways are being carved through districts where there is no need to demolish. They will wreck those districts not just in terms of houses being demolished but by virtue of the impact that they will have on the whole neighbourhood. I am speaking not only of Brent but of other areas, which have received much wider publicity on this matter. In my opinion, there has been a total lack of proper town planning. It is time that the planning departments were given a better rôle.
I turn now to Clause 23, on which I intervened earlier, which relates to creeping hotelisation, to use an ugly term. I look forward to hearing further details in Committee. By virtue of what we say today we may be supplied with further briefing material by County Hall.
I cannot see how this matter can be more than marginally affected, because I do not think that it can be properly policed. I do not see how we can expect to go into people's houses and see what is happening inside in terms of sleeping accommodation. I am not decrying the effort, because it needs to be made. We


discussed this matter on the Floor of the House about a year ago on a motion proposed by my hon. Friend the Member for Holborn and St. Pancras, South (Mrs. Lena Jeger). Not only is it unlikely to be more than marginally effective; it does not deal with what is threatening to become a more important problem.
No doubt the creeping hotelisation of houses will continue. The indications are that there was a switch away, and publicity has been given in the Press recently to the fact that ordinary family dwellings are being held as such, in character with modernisation, repairs and redecoration, but that tenants are being put out because the properties are being sold over their heads and the flats are being held for transient visitors. Flats in properties which are being switched to hotel-type accommodation are being let to visitors to London. Families and residents of long standing are being pressurised out one way or another. Where tenants are moving out voluntarily, instead of the vacancies being relet to other well-established residents or prospective residents of a permanent kind they are being made available for visitors to London.
Therefore, Clause 23 will not be able to tackle the problem. Although there may be some resistance ideologically by hon. Gentlemen opposite, at the end of the day the only way to tackle the problem, if the market pressures continue, is by municipalisation. Hon. Gentlemen opposite may not like this term. They may feel ideologically so committed against it, because we on this side of the House have been advocating it for so long, that they will do nothing about it. However, I suggest that the only way to hold rented accommodation in London is by municipalising it, with the help possibly of housing associations, but it must be under the policy, direction and positive action of local authorities.
This was one of the views expressed by the Layfield Committee on the ground not only of the hotelisation of residential property, but on the need to deal with housing adequately in central London.

Mr. Tugendhat: I do not wish to become involved in the question of municipalisation, as the hon. Gentleman

will appreciate. When dealing with blocks of flats, hotelisation is desperately unpopular with the bona fide residents, as the hon. Gentleman knows. I think that by virtue of that fact alone we could rely on considerable public participation in reporting abuses of this kind. Does the hon. Gentleman agree?

Mr. Freeson: Frankly, no. If the flats are to be relet as I have described, they will be relet as flats. I do not see how, in law, a local authority will be able to stop anyone doing that. I do not see how it can be policed. The hon. Gentleman said that he did not wish to become involved in the question of municipalisation, and that I understand, but sooner or later the logic of the situation will involve him. Having heard and read articles by him on housing, I suspect that he is a good deal nearer to the Socialist approach than to his party. When it becomes respectable and accepted as an idea by Conservative voters, as indeed is happening, perhaps we shall get hon. Gentlemen opposite supporting us on this matter.
Clause 23 will not solve the problem of properties being bought and sold over the heads of tenants, which is one of the spark-offs of this kind of activity, but some kind of tenants' enfranchisement measure would. Tenants would have to be notified by law of any prospective sale of property which they occupied. Local authorities would also have to be notified automatically when any prospective sale was to take place. Furthermore, tenants, forming themselves into a co-operative housing association, would be able to purchase the property by law, as of right, and/or to nominate the local authority to act on their behalf. I will not go into further detail but I suggest that the way to solve the problem is a mixture of municipalisation, tenant enfranchisement and socialisation of rented property, not Clause 23. It may help marginally, but it does not tackle or solve the problem. Sooner or later the problem must be tackled along these lines.
I turn finally to a very serious though perhaps not surprising omission from the Bill—on the subject of land in London. The time has long since come in city areas—certainly in London, which has the most intense housing stress—to empower local authorities to have first call


on all land becoming available for sale, and at controlled prices. I do not propose to go into detail as to how this should be done. I put forward proposals on these lines to the previous Secretary of State for the Environment over a year ago. They were thrown out, after I had had a long correspondence with him on the matter. Until we tackle this subject we cannot tackle London's housing problems—not just the specific problems that we have been discussing but the general question of housing.
One figure is on the record at County Hall. About 46,000 planning approvals for new dwellings in Greater London on land at present available for such development have not been taken up. Most of them have been approved for over three years. The land is there and the planning approvals are there. About 1,000 acres of this land exists in London. It is about time that action was taken by local authorities and the G.L.C., not just to put restraints on the people who are holding this land but to get that land into public ownership, so that it can be used for the housing that has been approved.
It is a scandal and a disgrace that this situation should continue and that the GLC should still fail to seek the appropriate powers to take action in London because it does not have the political will to get on with the job of housing.
Some years ago—I think as far back as 1967—a GLC housing programme was under way which would by now have resulted in between 9,000 and 10,000 new dwellings being started each year by the GLC alone—never mind the boroughs. In fact, I suspect that if that programme had been maintained it would by now have been much bigger. Today, I believe —quoting from memory—we have a situation in which the GLC started 4,000 dwellings last year. I am not sure whether it achieved even that—

Mr. Clinton Davis: It was fewer than 4,000.

Mr. Freeson: In fact, it was fewer than 4,000, instead of the 9,000 to 10,000 in the programme for this year. I believe that that figure could go up, and needs to go up, to 12,000 or 15,000 a year. But there has been a dismal and abysmal failure by the GLC in these last years

to undertake its responsibility in this field.
It is another disgrace and scandal that the biggest authority in the country should have failed so badly to keep to its housing programme. It failed not by accident but by political decision. It failed because it did not have the political will to get the houses built. We are all agreed on the need to get them built. The need is so great as to require in London a doubling of the new house building programme by local authorities generally, of which that 12,000 or 15,000 would be the GLC's annual contribution.
To spark off that programme, to get it going again, action needs to be taken on land. The first priority is to bring into public ownership the land with planning approval for 46,000 dwellings already granted, to get the dwellings started. There is nothing in the Bill to move along those lines, and this is probably the central issue in London today. The reason that it is not in the Bill is that the present administration at County Hall does not have the political will or desire to do anything more about the house building programme than its present pitiful record shows.

8.25 p.m.

Sir Brandon Rhys Williams: This is a Bill with which it is difficult to quarrel, and hon. Members on both sides have so far tended to refer to things which might have been in the Bill but are not, rather than its actual contents. I will tread the same path in what I have to say about Clause 23, which has already attracted some attention.
They say that imitation is the sincerest form of flattery, and I am naturally delighted that the GLC should have reproduced in this general powers Bill substantially, if not identically, the same provisions as were piloted through the House last year in a Private Bill introduced by my own borough. I am glad to see this protection extended for the benefit of all the boroughs of Greater London, because it is a thoroughly useful one.
I do not share the misgivings, particularly of the hon. Member for Willesden, East (Mr. Freeson), that it will prove unenforceable. This is something that only the passage of time will show. The fact that the conversion of property by creeping hotel development is illegal without


planning permission will deter many speculators, even if some are sufficiently audacious or foolhardy enough to go ahead and defy the regulations nevertheless. This is a useful measure, and I am delighted that it is in the Bill.
However, I wonder whether it is not possible to tackle the creeping hotel problem on a somewhat wider basis. I have previously recommended in the House another approach which I should like to repeat now in the hope that the Committee might be in order in considering it, possibly including something in the Bill along these lines.
What we are trying to tackle is a planning change which makes no apparent structural alteration, or may require none, but which, at the same time, substantially changes the character of the user of the property—particularly blocks of flats—and the sort of tenant. This is the point which regular Londoners find so objectionable.
The question is, how to catch all the changes which make up the creeping hotel problem. If we catch the provision of up-to-three-week accommodation, we shall have done something useful, but there are also short-stay tenancies of more than three weeks which change the character of a block when it has been used for unfurnished letting for perhaps seven or ten years or longer periods before that.
The hon. Member for Willesden, East is right to draw attention to the need to have a readily enforceable system of rules. If we analysed this, we might find our way to a solution which goes beyond what is in the Bill. First, the change that we are speaking of invariably increases the cost of the accommodation. That is obviously the purpose of the change. Second, the existing tenants have to be pushed out by one means or another. They are the people, as my hon. Friend the Member for the Cities of London and Westminster (Mr. Tugendhat) pointed out, who are most likely to draw attention to what is going on.
There is therefore an army of "informers" who are able to let the planning authorities know their suspicions as soon as they find that vacancies arise in a block of flats that the landlord seems in no hurry to fill. When one finds that

there is a number of empty flats in a block, one must suspect that a change of use is intended. This very soon attracts attention, particularly where tenants are somewhat jumpy about landlords' intentions. The extra revenue per room normally arises from an increase in the service charges, taking the service charges in a very general sense. Often one finds that quite luxurious accommodation is provided by expensive furnishing or redecoration, and a relatively high standard of service is sometimes provided in order to attract the sensational rents which can be obtained in central London, particularly at the height of the tourist season.
If one looks for increased service charges of a sudden kind or the introduction of a service charge where none existed previously, one is probably focusing one's attention on this problem in the best way. It is the sudden increase in service charges which the creeping hotelier is trying to achieve, so that is a point at which the change of use can be detected and controlled. I have suggested previously in the House that the introduction of a service charge when none existed previously, or an increase of 50 per cent. in service charges in any one year, or perhaps 100 per cent. over a longer period of two, three or even five years, should be taken to constitute a change of user for planning purposes and should require specific planning consent.
I do not know whether that is an idea which will commend itself to the Committee or whether it would be in order at this stage of a Bill of this kind to add to the provisions brought before the House on Second Reading. But I hope that my suggestion will receive further study in Committee or in the Department. I have given this problem a certain amount of thought and we have experience of it in South Kensington. I believe that this is the way ahead.
In general, I find what the Bill contains largely uncontroversial. I wish the Bill a safe and rapid passage through the Committee.

8.32 p.m.

Mr. Thomas Cox: I wish to speak about Clause 34, in the hope that if it is enacted it will help to improve some of the things about which I wish to comment.
I am sure that many hon. Members on both sides of the House who represent London constituencies will agree that whereas some parts of Britain have singular problems of unemployment, housing, transport, the environment, and so on, we in London have all of them. When I first became a Member of Parliament, at my advice surgery the problems generally centred on housing, but I now find that the question of employment is fast overtaking the problems of housing.
Many of my hon. Friends and I have asked Questions about the Government's policies on employment for London, in the hope that the Government could start to give some genuine hope to Londoners, be they school leavers or adults, as to the kind of staple secure employment that will be available for them in London. Although we are promised many things in the replies we receive, we know only too well, as do our constituents, that very little has been achieved despite the pressure we have been putting on the Government for many months.
Many of the inner London boroughs and a large number of the outer ones have long had a history of local employment —employing local people, both skilled and unskilled—and of apprenticeships being available to young people in those areas. Generally, because of this, the whole community has flourished. Unfortunately, much of this is now in fast decline. The most recent figures indicate that in the last six years—from 1966 to 1972—Greater London has lost over 400,000 jobs. Not only have these jobs been lost; the apprenticeships which clearly would have been available but for this kind of loss have also been lost. The position worsens month by month.
In my borough, which once had many industries operating along the waterfront from Battersea, through into Wandsworth and along to Putney, we have found in recent years that many industries have closed. Those industries offered a great deal of employment to local people in the borough and from surrounding boroughs. They have closed down. Regrettably, nothing has come into the borough to replace the jobs which have been lost in recent years. I am sure that other hon. Members could relate similar experiences in boroughs that they represent. Some of the jobs have obviously gone because factories have moved out.

Many of us are increasingly concerned that jobs have been lost not because industry has left but because factories have been closed down under the guise of one reason or another, and the owners of some of those factories have been making substantial profits from selling their sites, often to private developers and speculators who have embarked on enterprises which have not been of benefit to local residents. There can be no dispute about that.
It may surprise hon. Members that we in Greater London have the highest weekly figures of redundancies of any region in the country. We now lose 6,000 jobs a week. The great difficulty that this causes is something that we can all understand. In my constituency skilled men have lost their jobs and have taken unskilled employment, often in public services. Great credit is due to them for taking this work, because we know of the problems that have been facing many of the essential public services in our cities in recent years. They have taken these jobs, with a corresponding loss of income, for one reason only—to get stability of employment. Other skilled workers have tried to retain the skills and follow the jobs they may have been in for many years, and this has resulted in their travelling to other parts of London, with all the problems that that causes. They have to allow for travelling time and the increased cost of travelling resulting in a lower weekly income. This is much of the cause of the industrial disputes now taking place and, tragically, it is a point that the Government seem completely to miss or to ignore. It has great relevance to my constituency.

Mr. Ronald Brown: Does my hon. Friend realise that by the loss of these 400,000 jobs that cannot and will not be replaced there is therefore a continual decline throughout the industrial scene in London?

Mr. Cox: I agree with my hon. Friend, but I hope in the latter part of my speech to deal with the prospect which I hope we can hold out to London generally. If properly applied Clause 34 could provide for the redevelopment of industry and greater job opportunities in Greater London and I am sure that he, like myself and other hon. Members, would welcome that.

Mr. Eyre: I am interested in the points the hon. Gentleman is making. I see a number of compulsory purchase orders affecting land in various London boroughs, and often those orders affect small factories and businesses which have to close down and be reaccommodated. Often the inspector recommends to the local authority that it should provide alternative sites for those businesses. In view of what the hon. Gentleman said, perhaps he will agree that it is important that local authorities should do everything possible to provide alternative sites, in view of the important contribution that the businesses can make to the variety of employment in London.

Mr. Cox: I take the Minister's point and I go a long way with him. There are two factors on which he has not commented. One is the cost and the other—to which I referred earlier when I mentioned the Questions that we had put to the Government—is the granting of IDC certificates for London. We cannot get satisfactory answers, although many hon. Members have repeatedly put these Questions to the Secretary of State for Employment and the Secretary of State for Trade and Industry about the position in Greater London. With the greatest respect, we get a load of waffle, but nothing at all constructive.
To reply to the Under-Secretary's point, so concerned was my borough of Wandsworth about its loss of employment that it commissioned the report published in August of last year. Five council officers worked full time for many months in compiling the report. It has now been agreed that a full-time officer should be appointed with the sole responsibility of trying to encourage jobs back into Wandsworth. I am sure that the kind of efforts we are making in Wandsworth are typical of those being made by other London authorities.
In the debate the problems facing London and Londoners of all age groups as a result of loss of employment must be realised. Great criticism can be made of the GLC for its lack of concern in this matter. No concern has been shown by the GLC, although the necessary evidence has been available for a very long time.
There is hope under Clause 34 if it is correctly applied. My hon. Friend out-

lined the kind of finances available. I suggest that the finances available from the GLC added to those that the boroughs could raise by way of rates might total about £100 million a year. I do not suggest for a moment that that sum should be applied for employment alone, but a large part of it could be so applied and thus begin to give hope to many thousands of Londoners who, week after week, are uncertain how long they will remain in their jobs. This is a matter at which we should look in greater depth than we have so far done.
Several other points ought also to be examined. In Greater London some developers have been obsessed with certain kinds of development. One can cite office development or hotel development which has had little benefit for anyone living in my constituency.
The point already made in the debate regarding the amount of square feet of office development in London should be reiterated: nine million square feet unoccupied, eight million under construction and eight and a half with planning consent. We have gone mad on office development in London. But again there appears to be very little co-ordination between the GLC and the Government to stop this development. It appears to he very easy to obtain office planning permission in London—in spite of all the evidence available of millions of feet of office development remaining empty not for months or weeks but for years on end—rather than to try to encourage into London industries which will offer jobs for which skilled people are available in the city.
The kind of facts we must attempt to ascertain from the Government concern such matters as the granting of IDCs for London. As I said earlier, we are told that these are available, but one hears an entirely different story from any local authority that has attempted to get them.
Another matter which must be scrutinised much mare closely is the question of Government grants for industry to move out of London. This has become an absolute racket. Some firms will move out of London willy-nilly, without any concern for the social problems they cause purely because they receive substantial Government grants with which


they virtually remodernise their factories. In fact, such firms allow this run-down in the hope of receiving a sizeable Government grant and then remodernise with no concern for the many people who will be left behind and without in many cases hope of future employment.
It is, therefore, time for Government help to be given to encourage employment either to remain and develop, or to develop afresh, in London. All the evidence points to the kinds of job that have been lost when there is indisputably a demand for the kinds of product that were previously being made in London. But the jobs have gone, resulting in a great deal of human suffering. What is needed is regular meetings between representatives of the Government, the GLC and the London Boroughs Association, not meetings once or twice a year but regular meetings where the general problems of London can be discussed. I suggest a committee named "Employment and Industrial Development for Greater London". That shows how important the problem has become.
The issue crosses party lines. No party considerations are involved. At least, they should not be, because whether we represent the Labour Party or the Conservative Party our first obligation as London Members is to try to safeguard the job opportunities of Londoners. We have not been very successful. All the evidence points to the continuous rundown of job opportunities in London in recent years, and unfortunately that is continuing.
If there is willingness on the part of the Government and the GLC, there can be no question about the willingness of the boroughs, many of which have repeatedly requested the Secretary of State for Trade and Industry to have regular meetings at which the problem can be discussed. With that willingness by the Government and the GLC we can in a very short time start to give greater hope to Londoners of all ages—the adult man who finds himself redundant, with little hope of secure employment, and the youngster who, even when apprenticeships are available, and there are not many, will question the wisdom of entering one when he will ask, "How long will the factory remain open? Shall I still be an apprentice in a year, or will the firm then be closed?"
Our task as London Members is to fight to give that hope. It is of the utmost priority for all of us who are concerned about the problem.

8.48 p.m.

Mr. David Price: Unlike the hon. Member for Wandsworth, Central (Mr. Thomas Cox) and all the other hon. Members who have spoken so far, except my hon. Friend the Under-Secretary, I am not a London Member. But I am concerned about the Bill.
I am very dubious about Parliament's allowing the Greater London Council any further powers in any respect until the GLC learns to exercise its current extensive powers with more responsibility and more concern towards people and local authorities outside London. I shall illustrate my argument by reference to the behaviour of the GLC in South Hampshire. Hon. Members may have seen Motion No. 216. I can probably put my argument most succinctly by reading it to the House. It says:
That this House deplores the efforts of the Greater London Council to buy for London housing development 30 acres of land at Lowford in the parish of Bursledon, adjacent to the City of Southampton, which land lies in Area 18 of the South Hampshire Interim Plan (S.H.I.P.II), thus negating the entire strategy of the South Hampshire Structure Plan which specifically excludes planned immigration into South Hampshire; and invites the Secretary of State for the Environment to prevent the Greater London Council from buying land anywhere in South Hampshire which has major development problems of its own.
My complaint can be put on four counts. First, I do not believe that the GLC should be buying any land at all in South Hampshire because we have major growth problems with our own indigenous shortage of land. These problems have been brought together in the draft of the South Hampshire Structure Plan and are well known to GLC officials.
Secondly, I suggest that South Hampshire is too far away from London to be of any real assistance in the serious housing problems of London, whether for elderly people or for people of working age. If anyone in the GLC thinks it is possible to journey from anywhere in my constituency to work in the factories of Wandsworth which the hon. Member for Wandsworth, Central (Mr. Thomas Cox) was talking about, I recommend


him to do the journey and see what it is like.
As for elderly people, we have seen the same problem in other parts of England. The GLC have said that it is good for elderly people to be at the seaside, but certainly, to my knowledge, it has not proved successful. These people come down under pressure from the GLC and become the responsibility of other authorities and hence of other ratepayers. I am sure that every hon. Member knows that as regards the elderly there is a limit in any given area to the amount of voluntary support which can be got to help the old with their needs. There are threshold levels in regard to numbers. I do not believe that it is the proper solution for elderly people to take them away from the environment and the community they know, from their family, their children, their grandchildren and their neighbours. This is not, socially, the right answer and I do not believe that it is any solution to a major social problem.
My third point is that if the GLC wishes to buy land outside London it should have the common courtesy to consult the local authorities concerned. The GLC is not the only body concerned with the sort of problems we are hearing about today. I know its problems are on a larger scale, but qualitatively they are no different from the problems of many other local authorities around the country. Now particularly, when we are to have metropolitan and non-metropolitan counties, the GLC should recognise that although it remains the largest local authority in the country, we are not all non-league sides, if I may draw a further analogy, and the GLC the only member of the first division.

Mr. Freeson: I think we are all rather surprised, to put it mildly, by something the hon. Gentleman is telling the House. Could he tell us whether it is correct that the GLC has failed to hold consultations even with the joint planning committee for the South Hampshire development?

Mr. Price: If I may take the specific point I refer to in my motion, it is the Winchester Rural District Council, and according to my local authorities it was

never informed at all, nor was the Hampshire County Council. We have not yet got the new non-metropolitan county of Hampshire, so there are three parties to the structure plan—the Hampshire County Council and the county boroughs of Portsmouth and Southampton. In a year's time we shall become the new non-metropolitan county of Hampshire.
The fourth point I make is that, when the GLC bid for land, I believe they should do it openly and not through agents. My local authorities have described to me the recent action of the GLC in South Hampshire as akin to that of thieves in the night. That is the language of my own officers. I can tell the House that the South Hampshire members of both parties have supported the concept of our strategic planning, although there have been certain criticisms from some of the interests in our constituency that insufficient land for building is to be made available for immediate local needs
I think I ought to illustrate this by explaining to the House that the South Hampshire Structure Plan is itself based on three earlier studies—the South East study of 1964, the South Hampshire study of 1966 and the Strategic Plan for the South East of 1970. I draw the attention of the House to the first and third of these, because the GLC participated in both these plans. In the South Hampshire Structure Plan, just to show hon. Members that I do not think we are being unreasonable, we are talking about a growth rate from the base year of 1966 of an actual population of 800,000. I give round figures to keep it simple. It is estimated that by 1981 the population will be up to 1 million, that by 1991 it will be up to 1,200,000, and that by 2001 it will be up to 1,400,000. This is a massive growth.
It is also calculated that the permanent dwelling need in South Hampshire is likely to give rise to a new house building need of some 145,000 new dwellings in the period from 1966, our reference year, to 1991. That is from a 1966 base of 261,000.
I turn now to the context of land use, which, again, is relevant to my complaint against the GLC. Our total land needs between 1966 and 1991 will be approximately a further 10,000 acres above existing commitments and above what is made


available by redevelopment. This amounts to an increase of more than 16 per cent. in our total area of 60,000 acres of built-up land. I think that in these circumstances the House will agree that my complaint is not unreasonable.
The draft structure plan has not yet gone officially to my right hon. and learned Friend the Secretary of State for the Environment for approval. The plan states categorically:
No provision is made for the planned intake of population into South Hampshire.
Let it be noted by those hon. Members who represent London constituencies, lest they think that I and my colleagues on the local authorities in Hampshire are not sympathetic to the major problems which face the GLC, that we in Hampshire are involved in two properly planned overspill schemes at Basingstoke and Andover. We are playing our part in helping London.

Mr. Wellbeloved: London Members on this side of the House are entirely with the hon. Gentleman in the points he is making. We think it scandalous that the Conservative-controlled GLC should be treating local authorities with such contempt, particularly when in London there are areas of land which could be developed if oniy the GLC would get down to the job of doing it.

Mr. Price: There is nothing illegal in what the GLC is doing. The London Government Act 1963 gave it complete authority. Nor has my right hon. and learned Friend the Secretary of State any power to intervene in these matters. I have consulted those who are learned in the law on that point. I believe that the situation will have to be remedied by amending legislation, and I give notice that I and some of my colleagues from Hampshire may well endeavour to do so.
Since these issues of South Hampshire have come to light, and since I and some of my hon. Friends placed Early Day Motion No. 216 on the Notice Paper, other hon. Members from other parts of southern England have indicated to me somewhat similar cases in their own areas. I believe that if the GLC is determined to continue with this practice, legislative remedy is necessary. In the meantime, I cannot support a Bill to give any more power to the GLC until it has at least, in

the language of the lawyers, purged its contempt of the people and local authorities of Hampshire.

9.0 p.m.

Mr. Ronald Brown: I can assure the hon. Member for Eastleigh (Mr. David Price) that I very much support him in what he said about the GLC. I hope to show just cause for saying that he is right. I am continually having sessions with the GLC about constituency matters. The housing situation in Hackney is frightening.
I want to tell the House about one case in particular which I heard about from a probation officer. It concerns a family comprising a mother, father and seven children. The males are aged 23, 17, six and four, and the females 19, 14 and three. The two young men of 23 and 17 sleep in the same room as their sisters of 19 and 14. A younger brother shares one of the bunk beds with his sister. The other child sleeps with his parents. I raised this with the local authority because it is a local authority two-bedroom house in which this family is living. I received a letter from the local authority acknowledging that this was a real problem but saying that it was unable to help and not likely to be able to help in future. The letter said:
I am most concerned that such a serious overcrowding situation exists in a Council dwelling … everything possible will be done to transfer them to larger accommodation … In addition to these commitments, there are at present 18 4 and 5 bedroom families who have the maximum medical priority awaiting rehousing.
The case I have cited is not as bad as the other 18 and the House has heard of their bad living conditions.
I asked the council to nominate this family to the Greater London Council but was told that the council is not allowed to nominate such families to the GLC because it has no accommodation for four-bedroom families. I have had a copy of that document from the GLC sent to me. Having adduced all the arguments about not having any property, I am now told that not half a mile away from where this man is living in such appalling conditions there are 14 four-bedroom houses owned by the GLC up for sale. Providing any of these people can afford from £11,000 upwards, there is a four-bedroom house just down the road.
I have passed this information on to the Department and asked for a public inquiry into the scandalous situation whereby a Member of Parliament can be so misled in his inquiries. This is not the only case. I have frequently been told that there was no possibility of housing urgent cases because of a lack of premises yet at the same time the GLC has gone ahead with the sale of houses. I have a list of places within a short distance of my constituency where there are such houses for sale…14 four-bedroom houses, four four-bedroom houses, 16 three-bedroom houses, 33 three-bedroom houses, two two-bedroom houses.
Provided a person has from £8,000 up to a figure which has not yet been decided, but which if rumour in my constituency is correct will be fixed at £12,000 for a group of 10 three-bedroom houses, he can obtain a home. The document I have received points out that gross earnings per month must be five times the monthly mortgage repayments. An example is given showing that to afford the lowest-priced house of £8,000, payable over 25 years, a person needs £250 a month or £58·50 a week. This is a scandalous situation not least because it involves the misleading of Members of Parliament. My hon. Friends and I are told that there is no property available, yet the GLC prefers to play this silly game of putting homes up for sale.
Now I come to South Hampshire. All around London there are houses available for people living in Hackney where, incidentally, there are 10,000 people living in inadequate accommodation. More and more homeless are coming in from South Hampshire and other places and here the GLC is trying to sell houses in London to people from South Hampshire and at the same time going down to South Hampshire and stealing land from under the very noses of the county council. This is a GLC gone mad, and the House must at some stage take it to task.
It is an impossible position when we find that our constituents are living in these appalling, miserable conditions. I would underline the fact that the case I have quoted is typical and not unusual. It seems to me we would not be doing justice to our constituents if we did not raise such cases under the General Powers Bill, which is the only way I can protest

on behalf of my constituents against the work of the GLC.

Mr. Clinton Davis: Would my hon. Friend agree that the number of cases that he and I get of the kind to which he has been referring must be some 20 or 30 a week and that absolute hopelessness is written on the face of so many of our constituents?

Mr. Brown: I do confirm that. I have told the Minister this and the standard reply is that, however serious such cases are, they are very sorry but there are just no properties available. I am submitting tonight that that is grossly untrue. It is a political decision of the GLC that properties are not available.
I would like to talk on a second item, on which I intervened when my hon. Friend the Member for Wandsworth, Central (Mr. Thomas Cox) was speaking in relation to open spaces. For many years since I have been in the House I have raised the matter of the need for open spaces in my constituency, which has none. There is no green grass or trees. We have three principal areas which have been under compulsory purchase order since 1965, in Shepherdess Walk, in Shoreditch Park and Haggerston Park, each partially developed with an acre or two of very sparse grass.
Back in 1968 I took up with the GLC the question of establishing Shepherdess Walk Park. It would mean development, with houses being pulled down and families rehoused. The properties are in a disgraceful condition and people there who have been subjected to compulsory purchase since 1965 have sat patiently, coming to see me regularly about the situation. I have gone regularly to the council while trying to persuade my constituents to be patient in the hope that eventually the GLC would get round to doing the job.
In April 1971 an order was laid transferring open spaces in London from the GLC to the individual London boroughs. I prayed against that order but the Government would not find time for me to establish may case, why I thought it was bad and why Hackney would be unable to provide that kind of open space, first because of the lack of money, secondly, because families could not be rehoused, having regard to the situation about which I have spoken, and thirdly because it was


impossible to do all the reorganisation and taking out of industry, quite apart from housing.
The Minister—the hon. Member for Crosby (Mr. Graham Page)—sent me a three-page letter when I raised this matter in the House, pointing out how wrong I was and telling me that he had spoken to the GLC about the transfer of land in Shepherdess Walk and had been assured that conversations were going on between the GLC and the London Borough of Hackney and that there would be no problem.
Nearly two years have elapsed, there is no park, and no conversations are going on. Those people are still living in Shepherdess Walk in appalling conditions waiting to be rehoused. The London Borough of Hackney answers me by saying, "We are terribly sorry. We will get in the public health inspector and do what we can." The owners do not spend any money on the buildings because they are under a compulsory purchase order. Not only is there no park, which was planned years ago, but these people are forced to continue to live in deplorable conditions because the GLC, having started on this venture at my insistence in 1968, has handed it over to somebody else who is unable to do it. I do not blame the GLC, which was trying to shift the burden of responsibility, but I do blame the Government. The Government refused me the right to put my case before they approved the order.

Mr. Stallard: Will my hon. Friend accept that that is a common story in London? In North St. Pancras the plan for an open space has been in the state described by my hon. Friend not since 1965 but since 1951. The LCC sat on the proposals and when they were handed over to the borough a compulsory purchase order was put on the site. One can imagine the blight that has affected the area ever since 1951. Literally nothing has been done. Many of the houses have no standard amenities. The Government eventually turned down the compulsory purchase order proposal. The speculators move in and the harassment begins. But I will tell the House about that shortly if I catch your eye, Mr. Deputy Speaker.

Mr. Brown: I am grateful to my hon. Friend for supporting me. In years to come Clause 34 may put that matter to

rights and the borough council may be able to develop the open space.
The GLC has been dilatory, and that is why I am calling for a public inquiry. It is a matter of the greatest public importance, and the GLC should not be allowed to get away with this sort of behaviour.
On 26th January I wrote to the Minister, but so far I have received no reply. I ask him to stop the sale of the houses pending an inquiry into the needs of Hackney. It is a matter of great importance that a decision should be taken urgently.
I have raised frequently the transport situation in my constituency, which is an absolute disgrace by any yardstick. Every heavy juggernaut in London comes through the area. Night after night my constituents are kept awake by heavy vehicles. I have petitioned the GLC many times and recently the council has been a little more helpful.
Originally, I was misled into agreeing to a temporary ban on heavy vehicles using one road. I was given a promise that within 12 months the arrangement would be made permanent unless there was some impediment. That was three years ago, and the arrangement is still not permanent. One of my colleagues on the GLC told me that I was being misled by the council, but I chose to believe what the council said, since it is not my wont to disbelieve public representatives. But my colleague was right, and I am still waiting. Since my intention to oppose the Bill has become known I have received a letter from the GLC stating that it is the council's intention to put in train the legal formalities necessary to implement the promise given three years ago. I pay tribute to the GLC to that extent.
It is not the responsibility of hon. Members in this House to keep fetching and carrying for Greater London Council. The council knows what is wrong and it knows what its powers are and what it should be doing. It is quite insufferable that we have to act virtually as welfare officers running after the officers of Greater London Council to tell them to make sure that their political masters make intelligent decisions.
I hope that our discussion tonight will again underline to the Greater London


Council how very dissatisfied London Members are with our relationship. I accept the point made by the hon. Member for Cities of London and Westminster (Mr. Tugendhat) that we should have other means of expressing our grievances than those provided in debate on this Bill. It is unsatisfactory that on this occasion we have to make these comments, because our boroughs have asked for certain powers. But this is the only way in which we can put forward these problems.
There is a great problem in London over housing for nurses and teachers, who are in revolt. The Government will not allow teachers to get their measly allowance. The cost of living in the London Borough of Hackney where they are trying to teach is enormous. Yet the Government will not give them the London allowance to help them to cope with extra costs. I believe all the schools are closed either because of shortage of teachers or shortage of gas. It is an impossible situation, but the Government appear to ignore it in the hope that people will revolt and that the teachers will suffer opprobrium from the public. They are seriously wrong, for public support is behind the teachers.
When one sees the conditions under which they have to teach and the deplorable situation they have to face, one understands why they want some help to meet the cost of living in London. No one volunteers to come to teach in my constituency. They are all pressed men. When they come to the constituency they have nowhere to live and they find the conditions for work deplorable. They stay because they are dedicated—not because the conditions are right. They are loyal to the educational service and to the children. I pay them that tribute. London teachers are entitled to the London allowance in full. I support them 100 per cent. It is disgraceful that they are being forced to go on strike so as to call attention to the deplorable situation they face.
I hope that another way will be found for discussing our grievances. I believe the GLC is guilty of dereliction of duty and has behaved in a disgraceful way. What it has done in South Hampshire cannot be excused. Why does the council

go to South Hampshire to steal land when only a few yards away there is the London Borough of Bromley which is well enriched? They go to the London Borough of Bromley to do their dirty work. They have done a deal with that borough.

Mr. Freeson: Is my hon. Friend aware that, according to information which I have had put before me only this week, a similar arrangement or deal has been done between the present GLC administration and Kingston? It is an agreement not to build any GLC housing there, provided that there is a I per cent. nomination per year.

Mr. Brown: I thank my hon. Friend for that information. That is the kind of thing that is happening in terms of South Hampshire. The GLC is going all that way when there is plenty of land available in Kingston and Bromley which will help to solve some of these problems.

Mr. Thomas Cox: My hon. Friend has cited the situation in Bromley. Could I draw his attention to a Question which I tabled for answer on 11th December last when I sought to discover the number of local authority dwellings which were under construction. My hon. Friend will be surprised to hear that in Bromley there is not one GLC house under construction. Indeed the borough has only 228 under construction. In Enfield there is not one GLC house under construction. The borough has 272 under construction. In Hillingdon there is not one GLC house under construction. The borough has 551 under construction. In Kingston-upon-Thames six GLC houses are under construction—so at least Kingston is making a start.

Mr. Deputy Speaker (Sir Robert Grant-Ferris): Order. The hon. Gentleman's intervention is rather long, and he knows that he must not make two speeches.

Mr. Brown: I am grateful to you Mr. Deputy Speaker, and I am also grateful to my hon. Friend the Member for Wandsworth, Central, for drawing my attention to that information. We have tried to illustrate that the GLC has a responsibility which it has not been discharging. This is the gravamen of the charge we make. This is not a party political issue. Hon. Members in their constituencies have to face the people


and say to them, "There is no hope for you to obtain housing accommodation". I know of a mother and father and seven children living in a two-bedroomed council flat for whom there is no hope of alternative accommodation. The situation is absurd, and I hope that this debate will lead the GLC to behave like a genuine local authority. If it does not do so, then it must get out and let in somebody who can do the job.

9.23 p.m.

Mr. Michael McNair-Wilson: I cannot remain in my place and allow the Greater London Council to be attacked in this way, as though everything the council does and thinks is politically motivated. We have heard mention of open spaces. Why cannot the Labour-controlled Waltham Forest borough find £6,000 to convert derelict land into playing fields for the use of 400 children, when at the same time it can provide a sum of £15,000 to erect aerials for the reception of colour television? If the hon. Member for Shoreditch and Finsbury (Mr. Ronald Brown) thinks those are the right social priorities, I do not agree. That has nothing to do with the GLC. It has something to do with a council which has strange priorities and which claims to be Labour.
We have heard a good deal about housing and we in Waltham Forest have a waiting list of 6,000 people. I recently asked the housing manager why the figures seemed to go down so slowly, if at all. He answered that as people get married at a younger age, there is a greater demand for housing and people who live in bad houses are demanding better housing. The result is that housing that was once good enough to live in is no longer thought fit to live in—and nor should it be. This causes the problem.
In the same way when a tenement block is pulled down, then the housing accommodation that is put in its place must be of a much better standard than that which was provided in the tenement, and this means more units of housing, for generally people are asking for better housing. I agree that around Greater London there are too many sites that for various reasons have not been pressed into action. Such sites do not belong

just to the GLC but, for example, to British Rail and the British Waterways Board. The time has come for somebody to do a survey of land in London that could be used for housing. I suspect that we would find that there is a good deal more of it than many of us realise.

Mr. Freeson: Perhaps the hon. Gentleman has overlooked the fact that such a study was embarked upon and completed by the London Action Group, chaired by his hon. Friend the Under-Secretary of State for the Environment. We are still waiting to hear the results of such information being collated and additional acreage being made available to local authorities for housing purposes.
Secondly, is the hon. Gentleman aware that one of the reasons that Waltham Forest is suffering today is because, under the hon. Gentleman's party administration only a few years ago, there was a sharp cut in the housebuilding programme year by year for three years?

Mr. McNair-Wilson: I do not intend to pursue matters relating to Waltham Forest, as we are talking about the GLC, but if a site of roughly one acre of derelict land can remain completely useless and not be used for the benefit of children or for housing, I find it difficult to believe that the council, which is now Labour-controlled, has its priorities right.
I now want to speak about Clause 30 which relates to hygiene in food shops and stalls. I am sure that all hon. Members will agree that it is entirely right that we should pay the greatest attention to the standard of hygiene in food shops and at stalls. We must be concerned if there is any danger to public health because of vermin, refuse or any of the other dangers set out in the Bill as being within the terms of what the officer of health may discover.
This is the first time in any GLC Bill that the GLC has attempted to lay down one standard for street market stalls throughout Greater London. It is a departure from custom which I welcome. In my constituency there is a successful and bustling street market which has been in existence for 40 years. Anyone who has been to see it on a Friday or Saturday will realise that it


is something of a magnet for North-East London. It is welcomed by the shopkeepers in the High Street. They appreciate that it brings to them a great deal of custom.
The street market sells a wide variety of goods, including foodstuffs. The stalls are prized possessions of those who hold licences within the market. However, the market is licensed by the borough and therefore does not come under the GLC, except for Clause 30.
An unfairness which exists between some markets relates to the passing on of the holding of the stall from one family to another. The stalls often pass from father to son, or even from a father to a nephew. Under Section 21(2)(a) of the London County Council (General Powers) Act 1947, as amended by Section 33 of the London County Council (General Powers) Act 1962, when somebody holding a stall dies an application by the person or relative to whom the deceased stallholder wished to leave the stall must be made within 10 days. A number of the stallholders in Waltham-stow are of the Jewish faith. As I understand it, when a member of his family dies a Jew mourns for seven days. A situation is thus created whereby the son or the daughter of Jewish parents finds it extremely difficult to make application for the stall that once belonged to his or her father or mother. I consider this to be a considerable unfairness to persons of that faith, more especially because in Walthamstow and in the inner London boroughs application must be made within 10 days, whereas in the City of London 21 days are allowed. It seems nonsense to say that in one area of London there shall be a 10-day period while there is a 21-day period in another. Therefore, it is surely necessary for the GLC to produce some sort of common practice applying to all street markets on matters concerning applications for licences.
If I may pursue the point a little further, the word "relative" has different meanings in the City of London and in the outer boroughs or the old LCC area. In one case a very broad category of people is included and in the other a very narrow one. Here again, there is an unfairness which should be ironed out, though of course the GLC's Clause 30 is

beginning to introduce commonality, which is a move in the right direction.
The reference in Clause 30 to food hygiene suggests that the clause will hold good throughout the whole of Greater London. However, I do not know whether it will supersede legislation such as the Walthamstow Corporation Act 1956. Will the penalties laid down in Clause 30 replace those in the Walthamstow Corporation Act, or will both Acts have a bearing? If they will, the street traders of Walthamstow are likely to run a double risk. If a food inspector in Walthamstow believes that a stall is unhygienic he has the power to revoke the licence. But he must give seven days' notice and he must be willing to listen to an appeal from the stallholder. Under thte GLC's Clause 30, 24 hours' notice is all that is required to close down a stall. Will the stallholder in Waltham-stow be put in a position where he can be had under one of two Acts and, if so, which one?

Mr. Ronald Brown: The hon. Gentleman will find that the provisions under Part IV come directly from the London Boroughs Association. Waltham Forest will have been involved in the drafting of the clause. This is not a Greater London Council clause. This is the part of the Bill in which the GLC allows the London Boroughs Association to put forward its proposals. Waltham Forest will have the right to apply this power itself. In other words, in spite of the Walthamstow Corporation Act, presumably it feels that this proposed power will be helpful.

Mr. McNair-Wilson: I am grateful to the hon. Gentleman for raising that matter. I should have thought it was clear. But it is not. I know that there is provision for compensation in Clause 30 if subsequently the stallholder is found to be not guilty. However, there is some possibility that he is in jeopardy twice over, and that does not seem reasonable.
Then there is the matter of complaints which may be made against the stall-holder for having premises which are unsatisfactory or whose structure, fittings, fixtures and equipment are defective. Does that mean that all stall holders selling foodstuffs from now on should seek to have their stalls examined by a GLC inspector to ensure that they meet whatever are the criteria being laid down?

Mr. Ronald Brown: It is obvious that I did not explain myself very well. This is not the GLC. The Waltham Forest Borough Council will operate Clause 30. The clause happens to be contained in the GLC Bill, but only because the London Boroughs Association asked the GLC to insert Clause 30. It is the borough councils' clause. Waltham Forest will apply Clause 30, not the Greater London Council.

Mr. McNair-Wilson: I do not wish to pursue the point too far. The clause reads,
If on complaint by the proper officer a magistrates' court is satisfied".
We seem to be talking about the courts.
I should like to continue the point I was on, because there is strength in it. Who shall decide whether the stallholder's stall is up to the required standard? There is also the question of
infestation of vermin or accumulation of refuse,
all of which is said to be likely to be a hygiene risk.

Mr. Wellbeloved: The hon. Gentleman will see that in Clause 2 "proper officer" is defined as being the
officer appointed by a borough council".
Therefore, the Waltham Forest Borough Council will determine whether to proceed under the provisions of the Bill, if enacted, or under the provisions of any Act already in existence. It will be within the power of the local authority, not the magistrates' court. It is the local authority's proper officer who will initiate the necessary steps.

Mr. McNair-Wilson: I am grateful to the hon. Gentleman for that intervention, but I am informed that there is a risk of double jeopardy. Hence my question to whoever is to wind up the debate: is there a double jeopardy? If so, it seems unreasonable.
My last point relates to vermin or refuse. I gather that most stalls are lit in the winter by either Tilley or paraffin oil lamps. One can imagine the amount of refuse that is left around a street market. I invite any hon. Member to visit Walthamstow High Street on any Friday or Saturday evening to see the enormous amount of waste paper that accumulates around the stalls. Obviously

Tilley or paraffin oil lamps are high fire risks. Therefore, I suggest that the recommendation put forward by some of the stall holders, that electric points or some form of electric lighting should be supplied to avoid this risk, is worth consideration.
I come back to the point at which I started. There seems to be a real need to harmonise the regulations governing all street markets in Greater London.

9.37 p.m.

Mr. A. W. Stallard: I know that a number of my hon. Friends wish to participate in the debate even at this late hour, so I will be exceedingly brief.
I find much in the Bill that is commendable. I accept that many advances have been made. However I deplore the fact that we must use this device and time for the discussion which has proved so necessary by the contributions which have been made.
I have spent over 20 years in London government. On a number of occasions in the last two years I have been appalled at the apparent lack of knowledge of many Government spokesmen about conditions in London not only in housing, but generally.
I do not think that hon. Members generally appreciate the utter mismanagement of GLC property that has gone on in the past few years. The appalling conditions in which some GLC tenants have been forced to live during the past three or four years must be seen to be believed. These conditions have arisen because the GLC has run down its maintenance staff or has dismissed what was a very good direct labour force. This will create many difficulties unless it is stopped. The Bill does not mention that kind of management or anything like it.

Mr. Ronald Brown: My hon. Friend will probably be seized of the point that whilst the GLC has allowed the condition of its properties to deteriorate it has not been slow to put up to £5 a week the rent for a two-bedroomed flat, only one room of which can be used because the rest is so damp.

Mr. Stallard: My hon. Friend has anticipated what I was about to say regarding the rents charged for miserable hovels which go under the name of GLC


accommodation. I could enlarge on many matters, particularly the complete mismanagement—I could use stronger language—of many GLC estates and properties in inner London.
Like my hon. Friends, at my weekly advice service I am constantly confronted by constitutents who have tried for the last two or three years to get a minor repair done. After a while, these become major necessities, and still nothing is done. The state in which some of our people have to live in alleged G.L.C. flats, at fantastic rents, is a scandal and should be stopped.
There are some things in the Bill that I welcome, particulary Clause 23. My only reservation is that it should be extended. In inner London we are worried not only about the change from residential to tourist or hotel accommodation but also about the complete loss of rented accommodation, furnished and unfurnished. Hon. Members will know that I have been worried for a long time about the antics of speculators in London in this respect. It is very lucrative to empty properties with speculation in view. I could go on for the next two or three hours about the way in which properties are being emptied in London by professional "winklers", as they are called, so that the vacant property can be developed into hotel or similar accommodation or into furnished accommodation.
This is becoming a major problem in London, and this is why my hon. Friend the Member for Shoreditch and Finsbury (Mr. Ronald Brown) mentioned the difficulty of teachers, for instance. I did a small survey this week at one school, asking some of the teachers who had been to see me about the London allowance what kind of accommodation they had. One of the complaints of these young teachers is that they can no longer find accommodation in inner London. This of course, causing our education service in London many headaches, and it will get worse as time goes on.
As a result of my survey, I learned that in cases where these youngsters have been able to find anything at all it is usually some tatty room with a couple of sticks called furniture, for an average of £10 a week. I am prepared to give details of the teachers whom I consulted and their rents, and so on. It

is an impossible situation, and only gives more credence to the claim, not just for the London allowance for teachers but for far better wages and conditions to attract teachers into the inner London area, rather than creating the conditions in which they have to live.
I would have hoped that this provision could go further than just ending the change of use from residential to hotel. I should like completely to stop the change from residential. Perfectly good residential accommodation, above shops in the older-established shopping areas, is now being turned into offices, warehouses and stores. Gradually, what results is a dead area with shops and nothing above them. I would have liked to see this provision go further and prevent the change of any residential accommodation, particularly when it is rented, furnished or unfurnished.
I would certainly welcome some of the things which have been mentioned. The hon. Member for Walthamstow, East (Mr. Michael McNair-Wilson) mentioned something else which is long overdue—an attempt, under Clause 30, to control the conditions of some of the filthy stalls that we see, particularly in the West End. Probably the constituency of the hon. Member for the Cities of London and Westminster (Mr. Tugendhat) suffers most from this kind of thing. Having lived near his constituency for many years, I have often felt that something should be done in that regard and I am glad that a start has now been made to try to clean up some of these repulsive things which go under the name of stalls or food premises.
I welcome many of these provisions, but I would have liked them extended. I conclude by hoping that the sponsor of the Bill will agree with me on two counts—first, that the GLC has failed miserably in its complete and utter mismanagement of many of the estates in inner London, and, second, that the change of use of residential accommodation to hotel accommodation should be extended to include any change of use.

9.45 p.m.

Mr. Clinton Davis: Like many of my hon. Friends, I welcome some of the points made in the Bill. The Bill is rather like the Budget in a way. While it has some good points, its


thinking is monumentally irrelevant to the problems facing London at present, in just the same way as the Budget today was monumentally irrelevant to the problems facing the country. The Bill lacks a coherent philosophy, an urgency and a comprehension of these problems.
I should like to make one point at the very beginning of my remarks. I gave notice of this matter to the hon. Member for Sutton and Cheam (Mr. Tope) when he deigned to come into the Chamber for a few moments during this debate on London. It is rather noticeable that although the Liberal Party today espouses the cause of community politics, it espouses that cause everywhere but in this place. I am told that the hon. Member for Sutton and Cheam is his party's spokesman on housing. If I am speaking behind his back, that is not my fault. As a spokesman on housing, he has shown remarkable reticence about opening his mouth on the vital issue of housing in London. We have had debate after debate on housing, on rates and now on the Greater London Council. The hon. Member is elsewhere. One would have thought that Sutton and Cheam had suddenly declared UDI from the GLC. But it may be only the hon. Member for Sutton and Cheam who has declared UDI. However, it is a sad commentary on the Liberal Party, which makes a spurious claim to identify with the people yet is absent when the issues are being debated. I make no more point about that. It is not worth wasting any more time on the Liberal Party.
I refer next to something which troubles me enormously. I have given notice of this point to the hon. Member for Cities of London and Westminster (Mr. Tugendhat). This concerns Clause 12 and the powers of arrest which are to be conferred on
Any constable or any officer or servant of the Council authorised in writing to enforce any byelaws made by the Council under section 6 … and any person called to the assistance of such constable, officer or servant may without other warrant than this Act seize and detain any person committing or having committed any offence against any of such byelaws …
That is a gross interference with the liberty of the subject. It extends to virtually any servant of the Greater London Council. It extends, perhaps, to a foreman on a site who is authorised in writ-

ing under this clause to have afforded to him the powers of a constable, the power of arrest without warrant. I understand that the GLC employs Securicor. This power would be conferred upon members of the staff of Securicor. My hon. Friend the Member for Woolwich, West (Mr. Hamling) and I have spoken previously about Securicor. The clause would confer upon employees of Securicor this wide power of arrest without warrant.

Mr. William Shelton: Does the hon. Gentleman have any experience of such a power ever having being used?

Mr. Davis: If there is no evidence of the power having been used, there is simply no point in this power being invoked, as a number of my hon. Friends have said. I challenge the hon. Gentleman to indicate why this power should be included in the Bill if it is not to be used. I am told that it is based on virtually the same phraseology as the Thames River Steamboat Service Act 1904. The point about civil liberties may well have been overlooked in the debate, such as it was, which took place in 1904. I have done no research into that.

Mr. Tugendhat: The hon. Member was kind enough to give me notice that he was to raise this matter and we discussed earlier the implications of the Thames River Steamboat Service Act 1904, and the clause is based upon that. There are three points arising from the hon. Member's comments. First, the 1904 Act is still in operation as it applies to Greenwich Pier. Now that the GLC is acquiring more piers and is going into steamboat services it is an extension of the existing power rather than a new power. Secondly, though it is true that the officers of the council would have these powers in these circumstances it is important to realise that they can be applied only against persons, whose name or residence is unknown and cannot concurrently be ascertained. The officer of the council would have to take the malefactor to a police station or before a justice of the peace to be dealt with according to law.
The purpose of this provision is to meet those occasions which might arise on a boat on the river where rowdyism is taking place, where the GLC official attempts to bring it under control and is told to "get lost". This would enable


him to bring the malefactors before a justice of the peace or a policeman, and the fact that nothing could be done without a policeman or a justice of the peace is a safeguard.
This matter has, of course, been looked at by the Home Office without objection, and no doubt after the hon. Member's interjection the Committee which will look into the Bill, if the Bill gets a Second Reading, will pay particular attention to the point he raised.

Mr. Davis: Having listened to the hon. Member's wind-up speech by way of intervention, I am grateful to him for his observation but I suggest to him that what ought to "get lost" is this part of the Bill.

Mr. Ronald Brown: And the GLC with it.

Mr. Davis: To base it on the Steamboat Act of 1904 seems to me an unwise precedent. I do not think that the House will be convinced by the hon. Member and I do not think—I have a great deal of admiration for him—that he is convinced about it himself. The Bill will confer upon people who are not in uniform a very wide power of arrest and I do not think it should have any place in this sort of legislation.
I go on to one aspect of transport to which I have wanted to refer for some time. We are told that it is a little uncertain how Hackney will be affected by the motorway box, but my constituency will be affected by it. Many of my constituents already have been adversely affected by developments of that kind. There was the Eastway route which caused people to come to my surgery Friday after Friday and to write letters because they were in a state of acute distress through having to face up to the difficulties of noise nuisance and pollution, difficulties they still face, not for a matter of a few hours, but day after day and night after night. The problem has existed for about four years. Those who felt that the structure of their houses was being affected were constantly told by the GLC that this was nonsense. When they saw cracks appearing in the walls the GLC would say, "Absolute nonsense."
The tenants will not be assisted, as I understand it, by the Land Compensation

Bill, but they are as adversely affected as the owner-occupiers. They were at the periphery of the development and they had to cope with all the horrendous pressures that were involved. These difficulties will be multiplied throughout many areas of London, and the lessons are clear. I am glad that the Labour Party in London has declared unequivocally that it will have none of it.
I turn next to housing. We have had an appalling history of lack of consultation between Hampshire and the GLC and it is no fault of Hampshire at all. That insensitivity, that lack of co-operation, is reflected in so many other aspects of the behaviour of the GLC towards the London boroughs.
One of the matters that have been referred to by my hon. Friend the Member for Willesden, East (Mr. Freeson), about which the GLC ought perhaps not necessarily to consult so much but to do something practical, is the policy of the Tory outer London boroughs to refuse to co-operate in the provision of land for inner London. We have heard about the so-called agreement—a scandalous agreement—made between the GLC and Bromley. Where does the Minister stand on this? Presumably he approves. His silence would certainly indicate that he does not dissent from what has happened.

Mr. Eyre: I must ask the hon. Member to be careful in the allegations he makes. He will know that very considerable efforts have been made by the London Housing Action Group, which includes very experienced aldermen and councillors from both the major parties in London, to assess the situation and to encourage from all the boroughs in London the maximum contribution towards the very serious housing problems we know exist.

Mr. Davis: I like the hon. Gentleman so much. He has so many qualities. After all, he, like me, is a solicitor—

Mr. William Hamling: Brothers in crime!

Mr. Davis: But I am afraid that bromide will not do, because the London Housing Action Group has not produced an acre of housing in London. It is full of very good intentions, but it is urgent action that needs to be taken now.
Indeed, information was provided by London borough councils and outer London borough councils that 12,000 acres of land would be available by 1980 which would house thousands of people in the stress areas, but the Government are sitting idly back. If the Government were to move in and, as they should, demand that the outer London boroughs act and make land available now, a great many votes for the Conservative Party would be lost in the forthcoming GLC elections. The outer London boroughs do not want people from my area or that of my hon. Friend the Member for Shoreditch and Finsbury (Mr. Ronald Brown) or of my hon. Friend the Member for Acton (Mr. Spearing) or from the stress areas of Hammersmith and Kensington to move into these areas because they feel it would blight these areas and reduce values. One hears about this every time one argues the point with Conservatives in such areas.

Question accordingly negatived.

It being after Ten o'clock, the debate stood adjourned

This matter goes to the very heart of our problems. In Hackney we cannot resolve our housing problems without aid from outer London. If the Government merely say, "Let us wait for another six months or another year until the Action Group has reported and then we shall consider the report", let me tell the Minister that for every day that passes while this occurs, people continue to live in appallingly tragic conditions, where delay cannot be brooked any longer. This is the criticism I make not only of him, and of his Department, but in particular of the Government as a whole. There is no urgency because there is no will. If there were the will, action would be taken.

Mr. Tugendhat rose in his place and claimed to move, That the Question be now put.

Question put, That the Question be now put:—

The House divided: Ayes 35 Noes 49.

Division No. 78.]
AYES
[10.0 p.m.


Burden, F. A.
Jessel, Toby
Shelton, William (Clapham)


Chapman, Sydney
Jopling, Michael
Shersby, Michael


Clark, William (Surrey, E.)
Knox, David
Stanbrook, Ivor


Clarke, Kenneth (Rushcliffe)
Lamont, Norman
Taylor, Robert (Croydon, N.W.)


Cormack, Patrick
Lane, David
Tebbit, Norman


Crouch, David
Loveridge, John
Temple, John M.


Eyre, Reginald
McNair-Wilson, Michael
Thompson, Sir Richard (Croydon, S.)


Fidler, Michael
Maddan, Martin
Ward, Dame Irene


Fookes, Miss Janet
Murton, Oscar
Weatherill, Bernard


Gray, Hamish
Page, Rt. Hn. Graham (Crosby)



Gurden, Harold
Price, David (Eastleigh)
TELLERS FOR THE AYES:


Havers, Michael
Russell, Sir Ronald
Mr. Christopher Tugendhat and


Hunt, John
Shaw, Michael (Sc'b'gh &amp; Whitby)
Mr. Barney Hayhoe.




NOES


Blenkinsop, Arthur
Hunter, Adam
Smith, Cyril (Rochdale)


Boardman, H. (I.eigh)
Jones, Dan (Burnley)
Spearing, Nigel


Brown, Ronald (Shoreditch &amp; F'bury)
Lamond, James
Spriggs, Leslie


Buchan, Norman
Lawson, George
Stallard, A. W.


Buchanan, Richard (G'gow, Sp'burn)
Lestor, Miss Joan
Steel, David


Davis, Clinton (Hackney, C.)
McBride, Neil
Stewart, Rt. Hn. Michael (Fulham)


Davis, Terry (Bromsgrove)
Mackenzie, Gregor
Thomas, Jeffrey (Abertillery)


Douglas, Dick (Stirlingshire, E.)
McNamara, J. Kevin
Urwin. T. W.


Duffy, A. E. P.
Mikardo, Ian
Wainwright, Edwin


Eadie, Alex
Millan, Bruce
Walker, Harold (Doncaster)


Edwards, Robert (Bilston)
Morgan, Elystan (Cardiganshire)
Wells, William (Walsall, N.)


Ewing, Harry
Morris, Charles R. (Openshaw)
Whitehead, Phillip


Fernyhough, Rt. Hn. E.
Prescott, John
Woof, Robert


Fletcher, Ted (Darlington)
Rees, Merlyn (Leeds, S.)



Garrett, W. E.
Robertson, John (Paisley)
TELLERS FOR THE NOES:


Griffiths, Eddie (Brightside)
Roderick, Caerwyn E.(Brc'n&amp;R'dnor)
Mr. James Wellbeloved and


Hamilton, William (Fife, W.)
Short, Rt.Hn.Edward(N'c'tle-u-Tyne)
Mr. William Hamling.


Hooson, Emlyn
Small, William

Debate to be resumed upon Thursday next.

ADJOURNMENT

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Gray.]

DANGEROUS SUBSTANCES (CARRIAGE BY ROAD)

10.9 p.m.

Mr. Robert Edwards: I am grateful for this opportunity to discuss an issue of great importance, It deals with the movement of chemicals and toxic materials on the roads. The genesis of the debate was an incident last year in my constituency, when a wave of poison gas swept through a residential area and withered and destroyed little gardens and vegetation. It came from a steelworks, where the workers were disposing of drums fed by road to the works from a chemical firm. The drums contained liquid chlorine. The workers disposing of them had no knowledge of the contents, and as they burnt a hole in a drum a poisonous cloud swept the area. Many of my constituents suffered greatly from breathing trouble, and a passer-by collapsed and was taken to hospital.
No one on the spot knew how to handle this hazard and the poison gas continued to flow from the drum for two hours, until a group of specialists from ICI in Runcorn, many miles away, arrived to plug the hole. I attach no blame to the chemical firm concerned. With refreshing honesty, it admitted the mistake. It was a human mistake. Within two hours it had sent a team of competent emergency safety men. It offered compensation, and so far I have had no complaints from any of my constituents that they were not satisfied.
But my point is that the situation could have been much more serious than it was. It was a rather dramatic incident, but almost every day we read of road accidents involving the spilling of toxic materials, chemicals and liquids, to the great danger of the community and the men who drive the transport vehicles concerned.
On the borders of my constituency, a few years ago, a lorry-load of chemicals leaked and finally exploded, injuring 17 people and damaging 40 houses. Only a

few months ago a dreadful accident took place on the M6. A poor woman was literally dissolved in acid. One can barely imagine the agony of that woman and her family. The accident arose out of a collision, when sulphuric acid spilled out over the road. Only a few weeks ago an accident took place on the border of Belgium and France, when several people were killed and 100 houses shattered by the explosion of a great tanker after a collision.

Mr. John Loveridge: Has the hon. Gentleman considered the severity of the danger and the damage that might arise if a lorry carrying nuclear waste were to be hit and release its horrors upon us?

Mr. Edwards: We have an Act of Parliament and regulations dealing with the movement of radioactive material. The workers responsible for its transport are specially trained. They have special protective clothing. They are not allowed to touch the material when there is an accident. There is 24-hour monitoring. I want a similar Act of Parliament and regulations to protect the community and drivers from chemicals and toxic materials.
I have studied all of our Acts and regulations, including the one which I have mentioned. I cannot find anything in them laying down a standard for the men who move dangerous chemical and toxic materials. There is no standard training. It is left entirely to the firms concerned. I was so interested in this subject that I commissioned the Aston University of Birmingham to do a survey on the problem. Some of the information collected on my behalf is most interesting.
I discovered from the inquiries made among a cross-section of drivers—members of my own union, the Transport and General Workers Union—that 25 per cent. of those moving chemicals and toxic materials on the roads had no training whatever in the handling of these products in the event of an accident. Among contractors I discovered that 39 per cent. of the drivers had no training at all. It is scandalous that no compulsion is involved in the training of the men handling these products. I can not find in any of our Acts or regulations any protection for drivers. They do not even


mention it. Only when the whole community is in danger do we begin to think in terms of the danger to these workers.
I do not want to make these general statements without pointing out that some of our best firms, such as ICI, BP, Distillers and Allbright and Wilsons, have a very efficient srevice. They monitor the movement of their products 24 hours a day. They have trained safety squads ready to move in when there are dangers. Many of the contracting firms are not capable of handling the dangers that might arise for the community in an emergency. We need new legislation. At the moment this problem is under the control of four Government Departments. Surely we need one Department handling the new problem that faces the community as a result of the dangers arising from the development of new products almost every month of the year. We do not know the full extent of the danger of these products because some have never seen the light of day before.
In our discussions we discovered that the drivers had some very constructive suggestions to make. Not all were discontented. Many praised their firms and said they did not know what more could be done. Here are a few quick points from the replies to interviews and questionnaires. The drivers say that most vehicles are not adequate for the job. They are not strong enough. The noise and vibration in the cab should be cut down. They do not even have time to think. They say that continental vehicles are much quieter than ours. They also say that first-aid kits must be carried in all vehicles. They suggest that such lorries should have lights all round the back end, as the continental vehicles have. There should be a tightening up within the companies who contract transport to ensure that these drivers know what they are carrying, and that they are trained. There should be courses on safety and health. All these points come from the men concerned. They say that car drivers need to be more aware of what is involved in the driving of tankers and what they carry. It may be that larger labels or notices are required on the wagons. All chemical drivers should be medically examined on a regular basis, and so on.
I could give many more examples. I have mentioned these to show that drivers want to co-operate in finding a constructive solution to the problem. Many firms are supposed to supply what are called "transport emergency cards". Anybody who grumbles about a driver earning £50 a week who reads what a driver needs to do in an emergency would have second thoughts. In an emergency the driver should notify the police and fire brigade immediately, stop the engine, mark the road, warn other road users, keep the public away from the danger area, keep off the wind, put on protective clothing, in case of spillage contain liquids with sand and earth, avoid absorbing injurious substances, refrain from using a water jet on a leak in a tank, and, if a substance has entered water courses or sewers, or contaminated streams, advise the police, keep containers cool by spraying with water, and so on.
That is what these men are supposed to do in case of emergency. These are very important instructions, which are difficult to comply with. Nevertheless, they give information. But what do we find on inquiry? Taking a representative section of drivers, of those for manufacturing companies only 25 per cent. use these cards, and of contracting companies only 22 per cent. use them. Is it not time that this transport emergency card was made compulsory? This should be written into new legislation, so that at least a driver knows what he is handling. Every material that is being handled should be clearly defined. With information of this kind in his cap a driver should know how to deal with an emergency. I have touched only on the fringe of this important subject.
Only a few days ago I read a report based on what is happening in South Wales, where 18 chemicals had been found dumped in farmland and three poisonous chemicals had seeped into rivers and waterways. There must be control over the handling of waste materials. It should be monitored. In order to safeguard the community local authorities should be alerted and should know what is being dumped in their areas. There must be compulsory training and medical examinations for drivers, and a proper monitoring system 24 hours a day. If this is not done, I tremble to think of the terrible accidents that may take place in some congested area, which


will cause the community and the nation to wake up to the danger of a catastrophe that we have avoided so far.

10.25 p.m.

The Under-Secretary of State for the Home Department (Mr. David Lane): I am grateful, as I know the House will be, to the hon. Member for Bilston (Mr. Robert Edwards) for raising this subject tonight. The hon. Member has special experience, gained over the years, of dangerous chemicals. It is an exceedingly important and exceedingly urgent matter, and I am glad that the hon. Member has spoken so frankly. Towards the end of January we had a broadly similar debate, initiated by my hon. Friend the Member for Bristol, West (Mr. Robert Cooke). The fact that we have discussed this problem twice on the Adjournment within six weeks is a measure of its importance.
I am extremely sorry that the constituents of the hon. Member for Bilston suffered in the way they did from the accident he described. I acknowledge the fair comment he made on the chemical company concerned on that occasion.
The hon. Gentleman underlined the danger to the men who drive these lorries. We read of terrible tragedies when men are trapped in their cabs in ordinary accidents. How much more ghastly is an accident to a vehicle carrying one of the substances that the hon. Gentleman mentioned. I hope to persuade him that much of what he wants to be done is either already being done or soon will be done by regulations we have in mind. The accident he mentioned involved organic peroxide. We are to bring organic peroxides within our control in the near future.
The hon. Gentleman spoke of the importance of training drivers in emergency procedures. That is more for the Department of the Environment than for the Home Office, and I will draw the attention of the Department to what the hon. Member has said. He complained that responsibilities within Government are diffused. However much we might like a tidier solution, inevitably more than one Government Department is involved. I assure the hon. Gentleman that I will draw to the attention of my colleagues in the Department of the Environment the wider problems he mentioned at the end of his speech. My colleagues and I are

working closely together, through sitting on committees and through regular consultation at working level.
I remind the hon. Gentleman of the Robens Committee's recommendations which the Government have already accepted in principle. We shall soon be bringing forward further proposals for implementing the Robens recommendations in the direction of an across-the-board control which I am sure he will welcome, not least because of the extra safeguards this will bring to workers, wherever they may be, who have to handle dangerous substances either when they are static or in transit.
We are rightly and increasingly alarmed about the dangers which have been referred to. It is estimated that the number of dangerous substances of an inflammable, corrosive or toxic nature that are regularly being carried by road in this country is over 1,000. Some of them are very dangerous indeed, particularly if there is a fire or if they are spilt after an accident.
To put the matter into perspective, we already have regulations applying to more than 300 of these substances and to those which constitute the bulk in weight of the tonnage we are talking about. In the case of the substances that are already brought under control, we require notification of any accident involving death or personal injury from the substances concerned. During the last five years 15 such accidents have been notified, involving 35 injuries of which, alas, nine were fatal.
We acknowledge the need for more and better controls over the conveyance of these substances, and since 1965 the Government of the day have been working on a systematic plan to introduce and carry out a comprehensive scheme of regulations under the general guidance of my right hon. Friend's Standing Advisory Committee on Dangerous Substances. The existing controls, which are based on the Explosives Act 1875 and the Petroleum Consolidation Act 1928, have been introduced as a result of a system of priorities which has been drawn up by the advisory committee. As a result of its work, the first regulations were introduced in 1968 and they applied certain basic safety requirements and labelling controls to vehicles and packages used for the conveyance of inflammable


liquids. Three years later, in 1971, these were followed by a similar range of requirements for corrosive substances. That is the present position.
Looking to the future, later this year we propose to impose similar controls over organic peroxides such as those in the accident which the hon. Gentleman mentioned. Draft regulations have been prepared. We are circulating them within a few weeks to everyone concerned with the conveyance of these substances by road. We attach great importance to these consultations to make sure that we get the regulations right. We are also preparing regulations which will expand the existing controls over inflammable liquids and corrosive substances by laying down requirements about the construction and operation of the vehicles used to convey them. These construction and operation regulations also should be made before the end of this year, and I assure the hon. Gentleman that they will take full account of the accident on the M6 to which he referred.
The next priorities after that will be to extend the construction and operational controls to organic peroxides, and then to extend the whole range of controls over dissolved, liquefied and compressed gases and toxic substances. Here, I hope that we can draw lessons from the accident in France to which the hon. Gentleman referred. We believe that those are the major hazards.
Later again we want to extend controls to substances which give off inflammable gases on contact with water, to spontaneously combustible substances, inflammable solids and oxydising substances. Each of these classes includes certain potentially very dangerous substances, but in general we believe that they represent a lesser degree of risk, and they are not carried in the same quantity as the substances with which we are dealing earlier in the programme.
The labelling regulations provide that packages above a certain size containing the substance liable to control must be marked with the name of the substance and with a label showing the nature of the hazard. Similarly, the regulations which we shall be introducing about construction and operation are intended to ensure that all vehicles are fitted with

suitable engines, exhaust and electrical equipment, and that tank vehicles and their fittings provide an adequate degree of safety. All these requirements will surely help to increase the safety of drivers, for example, by laying down the strength of tank shells, the cabin separation distances, the stability of vehicles, and matters of that kind.
So much for the general range of the regulations and the programme which we are carrying through as urgently as we can. However, there are two other matters about which I wish to tell the hon. Gentleman. The "Tremcard" scheme was referred to by the hon. Gentleman as being very important. I share his hope that it will be pressed ahead with quickly. My latest information is that in the scheme, which is sponsored by the Chemical Industries Association, 100 Tremcards have been issued already and a further 100 are with the printers and should be available for distribution in May—and it is hoped that a third batch of 100 cards will be issued before the end of the year. I am sure that all the companies concerned will take note of what the hon. Gentleman said near the end of his speech.
The other safeguard, in addition to the statutory regulations, is round-the-clock advice. We have given guidance from the Home Office, and we shall go on giving it, to the emergency services about the steps needed to control fires or spillages involving dangerous substances. This kind of advice is constantly changing, because new substances are constantly being evolved. We need some facility for the emergency services to be able to get advice at short notice about any particular substance. I acknowledge the help that we are already receiving from some of the major chemical companies which provide a round-the-clock advisory service for incidents involving their products.
We have asked the Chemical Industries Association to consider whether arrangements could be made to provide the emergency services with advice of this kind on a nationwide basis. The association has set up a working party to consider the feasibility of such an arrangement and that working party is expected to report in the summer. We shall eagerly look forward to what it says.
Another point that I should mention, though it is more the responsibility of my right hon. Friend the Secretary of State for the Environment, concerns the suggestions that have been made about route control. My right hon. Friend the Minister for Transport Industries is approaching firms engaged in conveying dangerous substances to establish the routes customarily taken by their vehicles so that he can consider whether more might be done, through the imposition of voluntary controls or otherwise, to ensure that routes are adopted for this traffic which will reduce the prospect of accidents and will give rise to the least danger to the public in the event of such accidents occurring. In all this we have in mind the twin duties, which surely we all feel, to the workers concerned and to the public.
Whatever may be done to convey more of these substances by rail—many hon. Members want this to happen—we must assume that a large and increasing volume of this traffic will still travel by road. On the whole, despite the tragic accidents of which we know, the industry's record is good. In the absence, so far, of extremely wide-ranging controls, this is a tribute to the responsibility of the firms and drivers involved.
I very much hope that the increasing degree of control which I have sketched to the House, which we shall be introducing steadily during the months and years ahead, will do more than offset any likely increase in the volume of this road traffic. This greater safety can come about only if, recognising the dangers of these substances, other road users exercise the greatest care when they are in the neighbourhood of such loads. If that is to be achieved, surely the first need is for all members of the public—hon. Members can do a great deal to help in this respect in their constituencies—to be more conscious than they now are of the significance of the various warning notices that these vehicles carry. When the new marking controls come into operation the Government propose to bring them more widely to public notice than has been the practice hitherto.
I am grateful to the hon. Gentleman for raising this matter. I hope that he feels, from this quick sketch, that we are tackling the problem urgently. We certainly intend to go on doing so, for the greater safety of both the workers and the public.

Question put and agreed to.

Adjourned accordingly at twenty-two minutes to Eleven o'clock.